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Article: The role of (non-)transparency in a currency crisis model

TitleThe role of (non-)transparency in a currency crisis model
Authors
KeywordsCommon Knowledge
Currency Crisis
Multiple Equilibria
Transparency
Issue Date2002
PublisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/eer
Citation
European Economic Review, 2002, v. 46 n. 2, p. 397-416 How to Cite?
AbstractThis paper extends the work by Morris and Shin (Am. Econom. Rev. 88 (1998) 587-597) where multiple equilibria in the self-fulfilling currency attack models can be reduced to a unique equilibrium when agents observe fundamentals privately with small errors. We find that under a more general specification with realistic parameters, noisy private observations are generally insufficient to prevent the multiplicity of equilibria. The pivotal role played by the transparency of fundamentals/policies in currency crisis is also examined. Surprisingly, transparency may trigger rather than eliminate currency crises when fundamentals are relatively healthy. Our results may be relevant to research in other coordination problems. © 2002 Elsevier Science B.V. All rights reserved.
Persistent Identifierhttp://hdl.handle.net/10722/177693
ISSN
2015 Impact Factor: 1.095
2015 SCImago Journal Rankings: 1.712
ISI Accession Number ID
References

 

DC FieldValueLanguage
dc.contributor.authorChan, KSen_US
dc.contributor.authorChiu, YStephenen_US
dc.date.accessioned2012-12-19T09:39:33Z-
dc.date.available2012-12-19T09:39:33Z-
dc.date.issued2002en_US
dc.identifier.citationEuropean Economic Review, 2002, v. 46 n. 2, p. 397-416en_US
dc.identifier.issn0014-2921en_US
dc.identifier.urihttp://hdl.handle.net/10722/177693-
dc.description.abstractThis paper extends the work by Morris and Shin (Am. Econom. Rev. 88 (1998) 587-597) where multiple equilibria in the self-fulfilling currency attack models can be reduced to a unique equilibrium when agents observe fundamentals privately with small errors. We find that under a more general specification with realistic parameters, noisy private observations are generally insufficient to prevent the multiplicity of equilibria. The pivotal role played by the transparency of fundamentals/policies in currency crisis is also examined. Surprisingly, transparency may trigger rather than eliminate currency crises when fundamentals are relatively healthy. Our results may be relevant to research in other coordination problems. © 2002 Elsevier Science B.V. All rights reserved.en_US
dc.languageengen_US
dc.publisherElsevier BV. The Journal's web site is located at http://www.elsevier.com/locate/eeren_US
dc.relation.ispartofEuropean Economic Reviewen_US
dc.subjectCommon Knowledgeen_US
dc.subjectCurrency Crisisen_US
dc.subjectMultiple Equilibriaen_US
dc.subjectTransparencyen_US
dc.titleThe role of (non-)transparency in a currency crisis modelen_US
dc.typeArticleen_US
dc.identifier.emailChiu, YStephen: sywchiu@hku.hken_US
dc.identifier.authorityChiu, YStephen=rp01057en_US
dc.description.naturelink_to_subscribed_fulltexten_US
dc.identifier.doi10.1016/S0014-2921(01)00143-Xen_US
dc.identifier.scopuseid_2-s2.0-0036152224en_US
dc.relation.referenceshttp://www.scopus.com/mlt/select.url?eid=2-s2.0-0036152224&selection=ref&src=s&origin=recordpageen_US
dc.identifier.volume46en_US
dc.identifier.issue2en_US
dc.identifier.spage397en_US
dc.identifier.epage416en_US
dc.identifier.isiWOS:000173435200009-
dc.publisher.placeNetherlandsen_US
dc.identifier.scopusauthoridChan, KS=7406032609en_US
dc.identifier.scopusauthoridChiu, YStephen=7202775090en_US

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