Perspectives on the recent currency crisis literature

Economic coercion and currency crises in target countries

“…Earlier studies emphasized the importance of fiscal policies. First generation theories, for example, suggest that budget deficits and depletion of foreign reserves are the primary determinants of speculative attacks and the subsequent currency failures (Krugman, 1979; Flood & Marion, 1999; Flood & Garber, 1984). With the dramatically increasing number of incidences of financial crisis in the late 1980s and early 1990s, however, the focus of the literature has shifted to currency traders’ evaluation of the possibility of devaluation.…”

Stability of Thai Baht: Tales From the Tails

“…Nevertheless, experiences in China, Japan, Switzerland and many emerging market countries in the aftermath of the global financial crisis in 2008 have shown a vicious 2 Our work has been inspired by the extensive body of literature on currency crises. See Flood and Marion (1999) and Sarno and Taylor (2002) for surveys of theoretical studies on currency crises. Surveys of the empirical literature on currency crises are found in and Kumar et al (2003).…”

Lessons from financial crisis contagion simulation in Europe

“…The existing literature focused on various ways the financial turmoil might be disseminated across markets and provided interesting implications for policies and regulations that may prevent the contagion. Lowenstein (2001), Jorion (2000) and Flood and Marion (1999) linked the contagion to macroeconomic factors and advised on response‐policies in this premise. Kaminsky and Reinhart (2001, 2003) highlighted the role of speculative attacks pertaining to shocks that were triggered in financial markets and addressed regulatory shortcomings in this spectrum.…”