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....
| Main Authors: | , |
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| Format: | Working paper |
| Language: | English |
| Published: |
CEPR
1995
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