Publication

This paper provides an overview of the findings and conclusions of studies exploring the 1990s currency crisis crises from a comparative perspective. The authors first clarify the definition of a currency crisis by comparing it to other forms of financial crises. They present the evolution of theoretical models of currency crises and the symptoms of crisis occurrence. They then analyze the fundamental causes of currency crises, including fiscal imbalances, current account deficits, currency overvaluation, the performance of specific exchange rate regimes and structural weaknesses in the banking and corporate sectors. They finally assess to what extent crisis shocks can improve macroeconomic fundamentals and outline means of crisis prevention.