The Macroeconomic Theory of Exchange Rate Crises

摘要

The last forty years have been witness to a plethora of currency crises. The so-called debt crisis erupted in 1982 following Mexico's default and devaluation. By the time the crisis was over, most Latin American countries had devalued their currency and defaulted on their foreign debt. Crises are not just emerging-market phenomena. The 1990s started with crises in industrial Europe: the European Monetary System crises of 1992 and 1993. By the end of the crises in the Summer of 1993, the lira and the sterling had been driven from the Exchange Rate Mechanism (ERM) Finland and Sweden had abandoned their unofficial peg to the ECU the Spanish peseta, the Portuguese escudo, and the Irish punt had devalued and Europe's central bank governors and finance ministers had widened the ERM's bands to 15 percent. Only then did the currency market stabilize.