Strategic Complementarities and The Twin Crises  

Oleh:

Goldstein, Itay

Jenis: Article from Journal - ilmiah internasional
Dalam koleksi: The Economic Journal (EBSCO) vol. 115 no. 503 (Apr. 2005), page 368-390.
Topik: STRATEGIC; strategic complementarities; twin crises
Fulltext: 368.pdf (217.62KB)

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Perpustakaan Pusat (Semanggi) Nomor Panggil: EE28.17 Non-tandon: 1 (dapat dipinjam: 0) Tandon: tidak ada

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Isi artikel

The economic literature emphasised the role of strategic complementarities in generating banking crises and currency crises. Motivated by evidence from recent financial crises, we study a model, where strategic complementarities exist, not only within a group of creditors or within a group of currency speculators, but also between the two groups. The additional type of complementarities generates a vicious circle between banking crises and currency crises. This magnifies the correlation between the two crises and destabilises the economy. We show that, due to the vicious circle, a Lender of Last Resort might not be able to prevent bank runs.

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