Currency crises
Case: “Currency Crises” Harvard Business School case no. 9-799-088
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Textbook Reading: Chapter 8 (Section 8.3; pp. 278-280) and Chapter 10 (Section 10.4; pp. 357-366)
To get a good understanding of how currency crises occur, and their implications, see Yegor Gaidar’s 1999 article on “Lessons of the Russian Crisis for Transition Economies“.
For an assessment of whether the UK looks as though it is on the verge of a currency crisis, as of October 2022, see:
- “Does the UK look on the verge of a currency crisis?” Kaleidic Economics, October 2022
The key goal for monetary authorities is credibility: [Credibility flashcard]
What constitutes an optimal currency areas? [Optimal Currency Areas flashcard]
Further reading:
- Weisbrot, M., “Ten years after: The lasting impact of the Asian financial crisis” Center for Economic and Policy Research, August 2007 – A reflection on the East Asian crisis with a focus on the role of the IMF
- Chiodo, Abbigail J., and Owyang, Michael T., “A Case Study of a Currency Crisis: The Russian Default of 1998“, 2002, The Federal Reserve Bank of St. Louis – A review of different models and identification of specific triggers for currency crises.
| Learning Objectives: Understand the causes and triggers of a currency crisis. Consider indicators that predict a currency crisis. |