This paper reviews theoretical models of currency crises The paper initially explains the first generation models of currency crises These models assume that the crises occur as a consequence of inconsistent macroeconomic policies which cause deterioration in economic fundamentals and leads to the collapse of the exchange rate system The second generation models deal with the self fulfilling aspects of the currency crises These models consider the possibility of the crises even if a continuous deterioration in the economic fundamentals is not observed Third generation models assume the interaction between the financial sectors and private businesses and stress the weaknesses of alerting the speculative attacks In this context the role of the monetary policy is specifically mentioned Final part of the paper explains the interaction of currency and banking crises which is named twin crises It was argued that problems of the banking sector cause currency crises and currency crises further deepens the banking crises which results in a vicious circle Keywords: Currency Crises Balance Of Payments Crises Speculative Attacks Moral Hazard Twin Crises
📌 3 Key Takeaways
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Objective & Hypothesis:This paper reviews theoretical models of currency crises The paper initially explains the first generation models of currency crises These models assume that the crises occur as a consequence of inconsistent macroeconomic policies which cause deterioration in economic fundamentals and leads to the collapse of the exchange rate system The second generation models deal with the self fulfilling aspects of the currency crises These models consider the possibility of the crises even if a continuous deterioration in the economic fundamentals is not observed Third generation models assume the interaction between the financial sectors and private businesses and stress the weaknesses of alerting the speculative attacks In this context the role of the monetary policy is specifically mentioned Final part of the paper explains the interaction of currency and banking crises which is named twin crises It was argued that problems of the banking sector cause currency crises and currency crises further deepens the banking crises which results in a vicious circle Keywords: Currency Crises Balance Of Payments Crises Speculative Attacks Moral Hazard Twin Crises
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Key Findings & Data:This paper reviews theoretical models of currency crises The paper initially explains the first generation models of currency crises These models assume that the crises occur as a consequence of inconsistent macroeconomic policies which cause deterioration in economic fundamentals and leads to the collapse of the exchange rate system The second generation models deal with the self fulfilling aspects of the currency crises These models consider the possibility of the crises even if a continuous deterioration in the economic fundamentals is not observed Third generation models assume the interaction between the financial sectors and private businesses and stress the weaknesses of alerting the speculative attacks In this context the role of the monetary policy is specifically mentioned Final part of the paper explains the interaction of currency and banking crises which is named twin crises It was argued that problems of the banking sector cause currency crises and currency crises further deepens the banking crises which results in a vicious circle Keywords: Currency Crises Balance Of Payments Crises Speculative Attacks Moral Hazard Twin Crises
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Conclusion & Impact:This paper reviews theoretical models of currency crises The paper initially explains the first generation models of currency crises These models assume that the crises occur as a consequence of inconsistent macroeconomic policies which cause deterioration in economic fundamentals and leads to the collapse of the exchange rate system The second generation models deal with the self fulfilling aspects of the currency crises These models consider the possibility of the crises even if a continuous deterioration in the economic fundamentals is not observed Third generation models assume the interaction between the financial sectors and private businesses and stress the weaknesses of alerting the speculative attacks In this context the role of the monetary policy is specifically mentioned Final part of the paper explains the interaction of currency and banking crises which is named twin crises It was argued that problems of the banking sector cause currency crises and currency crises further deepens the banking crises which results in a vicious circle Keywords: Currency Crises Balance Of Payments Crises Speculative Attacks Moral Hazard Twin Crises
This paper reviews theoretical models of currency crises The paper initially explains the first generation models of currency crises These models assume that the crises occur as a consequence of inconsistent macroeconomic policies which cause deterioration in economic fundamentals and leads to the collapse of the exchange rate system The second generation models deal with the self fulfilling aspects of the currency crises These models consider the possibility of the crises even if a continuous deterioration in the economic fundamentals is not observed Third generation models assume the interaction between the financial sectors and private businesses and stress the weaknesses of alerting the speculative attacks In this context the role of the monetary policy is specifically mentioned Final part of the paper explains the interaction of currency and banking crises which is named twin crises It was argued that problems of the banking sector cause currency crises and currency crises further deepens the banking crises which results in a vicious circle Keywords: Currency Crises Balance Of Payments Crises Speculative Attacks Moral Hazard Twin Crises
Özet
Bu çalışma döviz krizi modellerini gözden geçiren bir literatür taramasıdır. Çalışma öncelikle, birinci nesil döviz krizi modellerini açıklamaktadır. Bu modeller tutarsız makro ekonomik politikalar sonucunda temel ekonomik göstergelerde meydana gelen bozulmaların döviz kuru sisteminin çökmesine neden olacağını ve krizin oluşacağını kabul etmektedir. İkinci nesil modeller ise döviz krizlerinin kendi kendini besleyen özelliklerini incelemektedir. Bu modeller, ekonomik göstergelerde sürekli bozulma gözlemlenmese bile krizlerin çıkabilme olasılıklarını dikkate almaktadır. Üçüncü nesil modellerde finansal kesim ve özel sektör firmalarının ilişkileri ile zayıflıklarının spekülatif atakları tetiklemesine vurgu yapılmaktadır. Bu kapsamda para politikasının rolüne özel olarak dikkat çekilmektedir. Çalışmanın son kısmında ikiz krizler olarak adlandırılan döviz ve banka krizlerinin birbirlerini etkilemeleri açıklanmaktadır. Banka sektöründeki krizlerin döviz krizlerine sebep olduğu ve döviz krizlerinin de banka krizlerini daha da derinleştirerek bir kısır döngüye sebep olduğu ileri sürülmektedir.
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