Equilibrium Currency Crises: Are Multiple Equilibria Self-fulfilling or History Dependent?

The viability of a fixed exchange rate system is shown to be state-or shock-dependent. We show, simply, Obstfeld's claim that there may be multiple equilibria - multiple shock values for which a regime switch becomes optimal. We distinguish between self-fulfilling and history-dependent crises....

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Bibliographic Details
Main Authors: Davies, G, Vines, D
Format: Working paper
Language:English
Published: CEPR 1995