Arbeitspapier

Macroeconomic regime switches and speculative attacks

This paper explains a currency crisis as an outcome of a switch in how monetary policy and fiscal policy are coordinated. The paper develops a model of an open economy in which monetary policy starts active, fiscal policy starts passive and, in a particular state of nature, monetary policy switches to passive and fiscal policy switches to active. The probability of the regime switch is endogenous and changes over time together with the state of the economy. The regime switch is preceded by a sharp increase in interest rates and causes a jump in the exchange rate. The model predicts that currency composition of public debt affects dynamics of macroeconomic variables. Furthermore, the model is consistent with evidence from recent currency crises, in particular small seigniorage revenues.

Sprache
Englisch

Erschienen in
Series: SFB 649 Discussion Paper ; No. 2006,025

Klassifikation
Wirtschaft
Monetary Policy
Policy Objectives; Policy Designs and Consistency; Policy Coordination
International Monetary Arrangements and Institutions
Thema
Coordination of monetary policy and fiscal policy
policy regime switch
currency crisis
speculative attack
fiscal theory of the price level
Geldpolitik
Finanzpolitik
Devisenspekulation
Währungskrise
Theorie

Ereignis
Geistige Schöpfung
(wer)
Maćkowiak, Bartosz
Ereignis
Veröffentlichung
(wer)
Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk
(wo)
Berlin
(wann)
2006

Handle
Letzte Aktualisierung
14.07.1970, 04:58 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Maćkowiak, Bartosz
  • Humboldt University of Berlin, Collaborative Research Center 649 - Economic Risk

Entstanden

  • 2006

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