NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Contagious Currency Crises

Barry Eichengreen, Andrew K. Rose, Charles Wyplosz

NBER Working Paper No. 5681
Issued in July 1996
NBER Program(s):   IFM

This paper is concerned with the fact that the incidence of speculative attacks tends to be temporally correlated; that is, currency crises appear to pass contagiously from one country to another. The paper provides a survey of the theoretical literature, and analyzes the contagious nature of currency crises empirically. Using thirty years of panel data from twenty industrialized countries, we find evidence of contagion. Contagion appears to spread more easily to countries which are closely tied by international trade linkages than to countries in similar macroeconomic circumstances.

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Document Object Identifier (DOI): 10.3386/w5681

Published:

  • Scandinavian Journal of Economics (1996).
  • Barry Eichengreen & Andrew K. Rose, 1999. "Contagious Currency Crises: Channels of Conveyance," NBER Chapters, in: Changes in Exchange Rates in Rapidly Development Countries: Theory, Practice, and Policy Issues (NBER-EASE volume 7), pages 29-56 National Bureau of Economic Research, Inc.

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