This paper builds a general-equilibrium model in which a currency crisis is triggered by prospective government deficits and shows that governments finance the resulting fiscal costs mainly through …
Studies how governments finance the fiscal costs of "twin" currency-and-banking crises and shows that debt devaluation and implicit or explicit fiscal reform, not just money printing, can explain why …
Argues that the 1997 Asian currency crisis was driven by large prospective government deficits -- the anticipated future fiscal cost of bailing out failing banking systems -- rather than by the …