Models with multiple equilibria are a popular way to explain currency attacks. Morris and Shin (1998) have shown that, in the context of those models, unique equilibria may prevail once noisy private information is introduced. In this paper, we generalize the results of Morris and Shin to a broader class of probability distributions and show | using the technique of iterated elimination of domi...

We study a model where the aggregate trading of currency speculators reveals new information to the central bank and affects its decision on whether to abandon a fixed exchange rate regime. We show that the learning process gives rise to informational complementarities among traders, which generates coordination motives in their trading and reduces the informational content of the market signal...

This paper presents a perfect foresight model of speculative attacks on emerging markets. Credit constrained governments are assumed to have two objectives: to accumulate liquid assets in order to self-insure against shocks to national consumption and to insure poorly regulated domestic ®nancial markets. This policy regime generates endogenous ®scal de®cits de®ned to include the growth of conti...

In some cases, currency crises are followed by strong recessions (e.g., recent Asian and Argentinean crises), but in other cases they are not. This paper uses Self-Organizing Maps (SOM) to search for meaningful associations between speculative attacks’ real effects and 28 variables that characterize the economic, financial, legal, and socio-political structure of the country at the onset of the...