Government bailouts and monetary disequilibrium: common fundamentals in the Mexican and East Asian currency crises

Rajan, Ramkishen S.; Sugema, Iman
December 2000
North American Journal of Economics & Finance;Dec2000 Index Issue, Vol. 11 Issue 2, p123
Academic Journal
Monetary disequilibrium seems to be a common thread that connects the Mexican and East Asian crises. Both crises have been characterized by governments attempting to minimize the adverse impacts of capital reversals on their domestic financial systems. This backstopping function of the monetary authority is modeled within an escape clause-based currency crisis framework which emphasizes the "nonmechanical" behavior of governments as they trade off various economic policy objectives. (C) 2000 Elsevier Science Inc. All rights reserved.


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