TY  - JOUR
AU  - Bordo,Michael D.
AU  - Schwartz,Anna J.
TI  - Why Clashes Between Internal and External Stability Goals End in Currency Crises, 1797-1994
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5710
PY  - 1997
Y2  - June 1997
UR  - http://www.nber.org/papers/w5710
L1  - http://www.nber.org/papers/w5710.pdf
N1  - Author contact info:
Michael D. Bordo
Department of Economics
Rutgers University
New Jersey Hall
75 Hamilton Street
New Brunswick, NJ 08901
Tel: 732/822-7152
Fax: 732/932-7416
E-Mail: bordo@econ.rutgers.edu

Anna J. Schwartz
E-Mail: N/A user is deceased
M2  - featured in NBER digest on 1997-04-01
AB  - We argue that recent currency crises reflect clashes between fundamentals and pegged exchange rates, just as did crises in the past.  We reject the view that crises reflect self-fulfilling prophecies that are not closely related to measured fundamentals. Doubts about the timing of a market attack on a currency are less important than the fact that it is bound to happen if a government's policies are inconsistent with pegged exchange rates.  We base these conclusions on a review of currency crises in the historical record under metallic monetary regimes and of crises post-World War II under Bretton Woods, and since, in European and Latin American pegged exchange rate regimes.
ER  -