We investigate whether foreign ownership shields firms from liquidity constraints following a financial crisis. Recent crises in East Asia, Latin America, and Russia have been characterized both by large currency devaluations and widespread collapse of the banking sector. Although a currency devaluation should increase exporters’ competitiveness and investment, a collapsing banking system may d...

This paper provides a theoretical model of an open economy credit channel including currency mismatch and financial fragility where exporting firms have access to international credit but non-exporting firms do not. The impact of the crisis is predicted to be dramatically different for exporters/non-exporters. We examine firms’ access to external finance in four Asian economies after 1997 using...

We analyze the multifractal spectra of daily foreign exchange rates for Japan, Hong-Kong, Korea, and Thailand with respect to the United States in the period from 1991 until 2005. We find that the return time series show multifractal spectrum features for all four cases. To observe the effect of the Asian currency crisis, we also estimate the multifractal spectra of limited series before and af...

experienced a massive reversal of the large foreign private capital inflows they had enjoyed through much of the 1990s. The net swing from inflows to outflows between 1996 and 1997 amounted to more than $100 billion for the five crisis countries—Indonesia, the Republic of Korea, Malaysia, the Philippines, and Thailand—or 11 percent of their gross domestic product (GDP) before the crisis. The re...

This paper analyzes the origins of currency crises for 20 OECD countries and South Africa from 1970 through 1998. The main contributions are in three areas. First, it tests for contagious crises and attempts to recognize contagion channels by employing a duration analysis. Second, to minimize the concerns regarding the accuracy of identified crisis episodes, our paper uses crisis episodes that ...

This paper proposes a continuous-time framework that explains some stylised facts in recent “twin crises” episodes. I show that access to the world capital market enables the domestic economy to achieve a more efficient allocation of resources. However, the banking sector becomes more fragile when this international borrowing is wealth-constrained. A temporary shock is amplified and becomes per...

We explore the role of inflation credibility in self-fulfilling debt crises. In particular, we propose a continuous time model of nominal debt with the potential for selffulfilling debt crises as in Calvo (1988) and Cole and Kehoe (2000). We characterize crisis equilibria conditional on the level of commitment to low inflation. With strong commitment, which can be interpreted as joining a monet...