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The Pros and Cons of Higher Transparency: The Case of Speculative Attacks

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Listed author(s):
  • Jean-Pierre Allegret

    ()

    (GATE - Groupe d'analyse et de théorie économique - CNRS - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines)

  • Camille Cornand

    (GATE - Groupe d'analyse et de théorie économique - CNRS - UL2 - Université Lumière - Lyon 2 - Ecole Normale Supérieure Lettres et Sciences Humaines)

Abstract

The aim of this paper is to evaluate to what extent more transparency can reduce the occurrence of speculative attacks. It proposes a survey of the literature about the pros and cons of transparency on the exchange rate market, which is one of the main pillars of the new international financial architecture. The effects of transparency are shown to be ambiguous both from a theoretical and empirical point of views. However, the imperfect connection resulting from the confrontation between theory and empirics suggests that some new insights are necessary in order to better catch stylised facts on the one hand and to better evaluate the theory on the other, as has been done in recent literature. This leads to new proposals for economic and informational policies.

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File URL: https://halshs.archives-ouvertes.fr/halshs-00180086/document
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Paper provided by HAL in its series Post-Print with number halshs-00180086.

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Date of creation: Mar 2005
Publication status: Published in Working Paper du GATE 2005-02. 2005
Handle: RePEc:hal:journl:halshs-00180086
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-00180086
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

Keywords: common knowledge; public and private info; speculative attack; transparency; attaque spéculative; connaissance commune; information publique et privée; transparence;

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Find related papers by JEL classification:
  • D70 - Microeconomics - - Analysis of Collective Decision-Making - - - General
  • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
  • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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  1. Heinemann, Frank & Illing, Gerhard, 2002. "Speculative attacks: unique equilibrium and transparency," Journal of International Economics, Elsevier, vol. 58(2), pages 429-450, December.
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Cited by:

  1. Meixing Dai, 2009. "Public debt and currency crisis: how central bank opacity can make things bad?," Economics Bulletin, AccessEcon, vol. 29(1), pages 190-198.
  2. Cheung, Yin-Wong & Friedman, Daniel, 2009. "Speculative attacks: A laboratory study in continuous time," Journal of International Money and Finance, Elsevier, vol. 28(6), pages 1064-1082, October.
  3. Meixing Dai, 2009. "Models of currency crises with self-fulfilling features: A comment," Working Papers of BETA 2009-14, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.

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