Self-Fulfilling Risk Predictions : An Application to Speculative Attacks /
The paper shows that changing market beliefs about currency risk can generate a self-fulfilling speculative attack on a fixed exchange rate. The attack does not require a later change in policies to make it profitable. This is illustrated by introducing an endogenous risk premium into a 'first-...
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Other Authors: | |
Format: | Journal |
Language: | English |
Published: |
Washington, D.C. :
International Monetary Fund,
1998.
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Series: | IMF Working Papers; Working Paper ;
No. 1998/124 |
Online Access: | Full text available on IMF |