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Research Details
Government Finance in the Wake of Currency Crises, Journal of Monetary Economics
Abstract
We address three questions: (i) Can classical models be reconciled with the fact that many crises are marked by high rates of depreciation and small increases in seignorage revenue? (ii) What are the implications of different financing methods for post-crisis rates of inflation and depreciation? (iii) How do governments pay for the fiscal costs associated with currency crises? To study these questions we use a general equilibrium model in which prospective government deficits trigger a currency crisis. We then use our model in conjunction with fiscal data to interpret government financing in the wake of three recent currency crises: Korea (1997), Mexico (1994) and Turkey (2001).
Type
Article
Author(s)
Craig Burnside, Martin S. Eichenbaum, Sergio Rebelo
Date Published
2006
Citations
Burnside, Craig, Martin S. Eichenbaum, and Sergio Rebelo. 2006. Government Finance in the Wake of Currency Crises. Journal of Monetary Economics. 53(3): 401-440.
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