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2009-02-17Diskussionspapier DOI: 10.18452/4176
Defending Against Speculative Attacks
dc.contributor.authorDaniëls, Tijmen
dc.contributor.authorJager, Henk
dc.contributor.authorKlaassen, Franc
dc.date.accessioned2017-06-15T23:52:33Z
dc.date.available2017-06-15T23:52:33Z
dc.date.created2009-04-23
dc.date.issued2009-02-17
dc.identifier.issn1860-5664
dc.identifier.urihttp://edoc.hu-berlin.de/18452/4828
dc.description.abstractWhile virtually all currency crisismodels recognise that the fate of a currency peg depends on how tenaciously policy makers defend it, they seldom model how this is done. We incorporate themechanics of speculation and the interest rate defence against it in the model ofMorris and Shin (American Economic Review 88, 1998). Our model captures that the interest rate defence reduces speculators’ profits and thus postpones the crisis. It predicts that well before the fall of a currency interest rates are increased to offset the buildup of exchange market pressure, and this then unravels in a sharp depreciation. This pattern is at odds with predictions of standard models, but we show that it fits well with reality.eng
dc.language.isoeng
dc.publisherHumboldt-Universität zu Berlin, Wirtschaftswissenschaftliche Fakultät
dc.rights.urihttp://rightsstatements.org/vocab/InC/1.0/
dc.subjectExchange Market Pressureeng
dc.subjectCurrency Crisiseng
dc.subjectInterest Rate Defenceeng
dc.subjectGlobal Gameeng
dc.subject.ddc330 Wirtschaft
dc.titleDefending Against Speculative Attacks
dc.typeworkingPaper
dc.identifier.urnurn:nbn:de:kobv:11-10097417
dc.identifier.doihttp://dx.doi.org/10.18452/4176
local.edoc.pages34
local.edoc.type-nameDiskussionspapier
local.edoc.container-typeseries
local.edoc.container-type-nameSchriftenreihe
local.edoc.container-year2009
dc.identifier.zdb2195055-6
bua.series.nameSonderforschungsbereich 649: Ökonomisches Risiko
bua.series.issuenumber2009,11

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