This paper investigates currency crises in an optimizing general equilibrium model with overlapping generations. It is shown that a rise in government budget deficits financed by future taxes generates a decumulation of external assets, leading up to a speculative attack and forcing the monetary authorities to abandon the peg. [...]

Budget Deficits and Exchange-Rate Crises

PIERSANTI, Giovanni
2007-01-01

Abstract

This paper investigates currency crises in an optimizing general equilibrium model with overlapping generations. It is shown that a rise in government budget deficits financed by future taxes generates a decumulation of external assets, leading up to a speculative attack and forcing the monetary authorities to abandon the peg. [...]
2007
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Utilizza questo identificativo per citare o creare un link a questo documento: https://hdl.handle.net/11575/3101
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