What is it about?
Both productivity shocks and risk premium shocks trigger currency crises in emerging markets. In addition, the short-term external debt and overvaluation of exchange rates explain exchange rate dynamics.
Featured Image
Why is it important?
This is the first empirical research rigorously based on the three generational theoretical balance of payments crisis models.
Perspectives
A 1 percentage point increase in the policy interest rate is associated with a 1 percentage point appreciation of domestic currency.
Dr. Ryota Nakatani
International Monetary Fund
Read the Original
This page is a summary of: The Effects of Productivity Shocks, Financial Shocks, and Monetary Policy on Exchange Rates: An Application of the Currency Crisis Model and Implications for Emerging Market Crises, Emerging Markets Finance and Trade, October 2016, Taylor & Francis,
DOI: 10.1080/1540496x.2016.1216836.
You can read the full text:
Contributors
The following have contributed to this page
