This PDF is a selection from an out-of-print volume from the National Bureau of Economic Research Volume Title: Currency Crises Volume Author/Editor: Paul Krugman, editor Volume Publisher: University of Chicago Press Volume ISBN: 0-226-45462-2 Volume URL: http://www.nber.org/books/krug00-1 Publication Date: January 2000 Chapter Title: Front matter, Currency Crises Chapter Author: Paul R. Krugman Chapter URL: http://www.nber.org/chapters/c8686 Chapter pages in book: (p. -12 - 0)
Transcript
This PDF is a selection from an out-of-print volume from the National Bureauof Economic Research
Volume Title: Currency Crises
Volume Author/Editor: Paul Krugman, editor
Volume Publisher: University of Chicago Press
Volume ISBN: 0-226-45462-2
Volume URL: http://www.nber.org/books/krug00-1
Publication Date: January 2000
Chapter Title: Front matter, Currency Crises
Chapter Author: Paul R. Krugman
Chapter URL: http://www.nber.org/chapters/c8686
Chapter pages in book: (p. -12 - 0)
This Page Intentionally Left Blank
Currency Crises
A National Bureau
of Economic Research
Conference Report
Currency Crises
~~
Edited by Paul Krugman
The University of Chicago Press
Chicago and London
PAUL KRUGMAN is professor of economics at Princeton University and a research associate of the National Bureau of Economic Research.
The University of Chicago Press, Chicago 60637 The University of Chicago Press, Ltd., London 0 2000 by the National Bureau of Economic Research All rights reserved. Published 2000 Printed in the United States of America 09080706050403020100 1 2 3 4 5 ISBN: 0-226-45462-2 (cloth)
Library of Congress Cataloging-in-Publication Data
Currency crises / edited by Paul Krugman. p. cm.-(A National Bureau of Economic Research
conference report) Includes bibliographical references and indexes. ISBN 0-226-45462-2 (cloth : alk. paper)
1. Currency question-History-20th century. 2. Foreign exchange-History-20th century. 3. Financial crises-History- 20th century. I. Krugman, Paul R. 11. Conference report (National Bureau of Economic Research)
HG3881 .C87 2000 332.4'5-dc21
00-037712
8 The paper used in this publication meets the minimum requirements of the American National Standard for Information Sciences--Permanence of Paper for Printed Library Materials, ANSI 239.48-1992.
National Bureau of Economic Research
Officers
Carl F. Christ, chairman Kathleen B. Cooper, vice-chairman Martin Feldstein, president and chief
Robert Mednick, treasurer secretary Sam Parker, chiefjnancial oficer
Susan Colligan, corporate secretary Kelly Horak, controller and assistant
Peter C. Aldrich Elizabeth E. Bailey John H. Biggs Andrew Brimmer Carl F. Christ Don R. Conlan Kathleen B. Cooper George C. Eads
Martin Feldstein Rudolph A. Oswald Stephen Friedman Robert T. Parry George Hatsopoulos Peter G. Peterson Karen N. Horn Richard N. Rosett Judy C. Lewent Kathleen P. Utgoff John Lipsky Marina v.N. Whitman Leo Melamed Martin B. Zimrnerman Michael H. Moskow
Directors by University Appointment
George Akerlof, California, Berkeley Jagdish Bhagwati, Columbia William C. Brainard, Yale Glen G. Cain, Wisconsin Franklin Fisher, Massachusetts Institute
Saul H. Hymans, Michigan
Marjorie B. McElroy, Duke Joel Mokyr, Northwestern Andrew Postlewaite, Pennsylvania Nathan Rosenberg, Stanford Craig Swan, Minnesota David B. Yoffie, Hurvard Arnold Zellner, Chicago
of Technology
Directors by Appointment of Other Organizations
Marcel Boyer, Canadian Economics
Mark Drabenstott, American Agricultural
Gail D. Fosler, The Conference Board A. Ronald Gallant, American Statistical
Robert S. Hamada, American Finance
Robert Mednick, American Institute of
Association
Economics Association
Association
Association
Certified Public Accountants
Richard D. Rippe, National Association for
John J. Siegfried, American Economic
David A. Smith, American Federation of
Business Economics
Association
Labor and Congress of Industrial Organizations
Development
Association
Josh S. Weston, Committee for Economic
Gavin Wright, Economic History
Directors Emeriti
Moses Abramovitz Franklin A. Lindsay Bert Seidman George T. Conklin, Jr. Paul W. McCracken Eli Shapiro Thomas D. Flynn Lawrence R. Klein
Since this volume is a record of conference proceedings, it has been exempted from the rules governing critical review of manuscripts by the Board of Directors of the National Bureau (resolution adopted 8 June 1948, as revised 21 November 1949 and 20 April 1968).
Geoffrey H. Moore James J. O’Leary
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Con tents
1.
2.
3.
4.
5.
Acknowledgments
Introduction Paul Krugman
ix
1
Currency Crisis and Unemployment:
Barry Eichengreen and Olivier Jeanne Comment: Michael D. Bordo
Sterling in 1931 7
Political Contagion in Currency Crises 47 Allan Drazen Comment: Carmen M. Reinhart
Balance-of-Payments Crises in Emerging Markets: Large Capital Inflows and Sovereign Governments 71 Guillermo A. Calvo Comment: Roberto Rigobon
The Onset of the East Asian Financial Crisis Steven Radelet and Jeffrey Sachs Comment: Frederic S. Mishkin
Is Launching the Euro Unstable in the Endgame? Robert P. Flood and Peter M. Garber Comment: Peter B. Kenen
105
163
vii
viii Contents
6. The Mexican Peso in the Aftermath of the 1994 Currency Crisis Sebastian Edwards and Miguel A. Savastano Comment: J. Bradford De Long
The Aftermath of the 1992 ERM Breakup: Was There a Macroeconomic Free Lunch? Robert J. Gordon Comment: Paul Krugman
183
7. 24 1
8.
9.
10.
Current Account Reversals and Currency Crises: Empirical Regularities 285 Gian Maria Milesi-Ferretti and Assaf Razin Comment: Jaume Ventura
Panel Presentation: The Asian Model, the Miracle, the Crisis, and the Fund Jeffrey A. Frankel
327
Panel Presentation: Involving the Private Sector in Crisis Resolution Peter B. Kenen
Contributors Author Index Subject Index
339
345 347 351
Acknowledgments
Thanks to those who made this conference possible, above all Kirsten Foss Davis and the rest of the NBER Conference Department, without whom we would have experienced a crisis as well as studying them!
