currency crises models

Craig Burnside , Martin Eichenbaum and Sergio Rebelo
From The New Palgrave Dictionary of Economics, Second Edition, 2008
Edited by Steven N. Durlauf and Lawrence E. Blume
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Currency crises have occurred frequently in the post-war era. In this article we review the literature on the causes and consequences of currency crises. First-generation models attribute a central role to fiscal policy as a fundamental determinant of crises. Second-generation models emphasize the possibility of self-fulfilling speculative attacks and multiple equilibria. Third-generation models stress how financial fragility can lead to currency crises.
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How to cite this article

Burnside, Craig, Martin Eichenbaum and Sergio Rebelo. "currency crises models." The New Palgrave Dictionary of Economics. Second Edition. Eds. Steven N. Durlauf and Lawrence E. Blume. Palgrave Macmillan, 2008. The New Palgrave Dictionary of Economics Online. Palgrave Macmillan. 22 November 2017 <> doi:10.1057/9780230226203.0351

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