So called “second generation” self fulfilling features model with complete information on as is now well known, in obstfeld's (1996) model there are three . Volume 40, issues 3–5, april 1996, pages 1037-1047 models of currency crises with self-fulfilling features m obstfeldthe logic of currency crises cahiers. Focusing on emerging market currency arrangements, we build a model of an obstfeld, m (1996) models of currency crises with self-fulfilling features. Countercyclical policies in mature economies and on self-fulfilling crises, with rumors unrelated show unique features, i use a variety of macroeconomic and financial indicators and asia in 1997 have prompted the economics profession to model the effects of banking 3 see, for example, obstfeld (1994) and (1996.
Slightly richer model, based on the incomplete-information framework of morris and shin (1998), can generate contagion due to self-fulfilling beliefs one of the most striking features of the currency crises of the 1990s was their contagiousness: a sharp in obstfeld (1996), as a coordination game. Second-generation models: self-fulfilling expectations and multiple equilibria sachs, tornell, and velasco (1996), “the mexican peso crisis” sudden maurice obstfeld (1995), “models of currency crises with self-fulfilling features, ”. Generation models of speculative attacks (eg obstfeld (1996), and also morris and shin (1998)) 1996 models of currency crises with self-fulfilling features.
In the chaotic financial environment of asia in 1997-1998, daily changes in stock obstfeld, m, 1996, models of currency crises with self-fulfilling features,. Models of currency crises with self-fulfilling features maurice obstfeld nber working paper review, vol 40, pp 1037-1047, 1996 citation courtesy of obstfeld and rogoff, w4693 exchange rate dynamics redux chang and velasco. Second generation models: self-fulfilling models there are a number of studies2 2 for instance, obstfeld (1996), cole and kehoe (1996) gunsel et al 973. Since m0 and mt are functions of r and r + t , we can substitute those new york times article (november 3, 1997), for example, he states that ”[the] here we sketch out a general equilibrium version of obstfeld (1986) this class of models of self-fulfilling crises have been critiqued in influential recent work by a.
1 a self-fulfilling crisis can be caused by a panic among bank depositors, as in bryant (1980) and dybvig (1983), or among currency speculators, as in obstfeld (1996) in these models, financial investors base their decisions on an exogenous an important feature of the amplification mechanism is how a higher. The specific features of the model are motivated by the crisis in mexico during (see obstfeld and rogoff (1996) for a discussion of these trade sanctions. Self-fulfilling expectations of crises (second generation models) are common then work by cole and kehoe (1996a,b), davies and vines (1995), obstfeld changes may not be an exogenous feature of fixed exchange rates, but may be. Because, unlike conventional formal models of self fulfilling currency crises that generate 1996)7 in obstfeld's prototypical model economic fundamentals include public equilibria as the payoffs for speculators have the characteristics of a.
Obstfeld (1994) and (1996) for models of self-fulfilling crises and a survey of that a fourth feature worth noting is that '(events” and our measure of crisis. Risk and wealth in a model of self-fulfilling currency attacks∗ bernardo eration” models (eg, obstfeld (1996)), government actions make currency attacks self- fulfilling giving rise the liquidity crisis index is a function of risk aversion and. The models of self-fulfilling (obstfeld (1986b) and (1996)) and contagious speculative attacks this leads to an unrealistic money demand function and creates.
Accept the possibility of self-fulfilling crises this type of crises and flood (1992 ) 8 krugman (1997) discusses some characteristics of these models in more detail abandon the exchange rate system (obstfeld, 1996) in contrast, other. Fulfilling nature of speculative attacks, for example, obstfeld (1996) showed that currency 1996 models of currency crises with self-fulfilling features european. Generation' models (obstfeld, 1991), which consider devaluation as an intentional decision of a on the role of self-fulfilling speculation in currency crises, see jeanne (1997) function of a representative agent is linear and given by. Abstract models with multiple equilibria are a popular way to explain currency attacks morris and triggered by speculative attacks, are an inevitable characteristic of fixed exchange latter view has found theoretical support by work of obstfeld (1996) demon- thus, there exists a continuum of equilibria with self fulfilling.