TY  - BOOK
AU  - Berger,Wolfram
AU  - Wagner,Helmut
TI  - Spreading Currency Crises: The Role of Economic Interdependence 
T2  - IMF Working Papers; Working Paper
SN  - 1451856458 :
SN  - 1018-5941
PY  - 2002///
CY  - Washington, D.C.
PB  - International Monetary Fund
KW  - Crisis Probability
KW  - imf
KW  - Currency Crises
KW  - Currency Crisis
KW  - Exchange Rate
KW  - Fixed Exchange Rate
KW  - International Monetary Arrangements and Institutions
KW  - Germany
N2  - We analyze in this paper how the mutual dependence of private sector expectations in different countries on one another influences the stability of fixed exchange rate regimes. The crisis probabilities of countries trading with one another are interdependent because wage setters react to an imminent loss of international competitiveness stemming from an increase in the crisis probability of a trading partner. If a currency crisis in one country is perceived to be increasingly likely, the probability of devaluation of its trading partners' currencies to restore their international competitiveness rises as well. Thus, not only actual devaluations but also an increasing crisis probability may trigger currency crises elsewhere. We show that not only fundamental weaknesses but also spontaneous shifts in market sentiment may play a role in precipitating currency crises
UR  - http://elibrary.imf.org/view/IMF001/06411-9781451856453/06411-9781451856453/06411-9781451856453.xml
UR  - http://www.imfbookstore.org/IMFORG/9781451856453
ER  -