A Model of Exchange Rate Crises with Partisan Governments

Posted: 28 Jun 2001

See all articles by Pierre-Guillaume Meon

Pierre-Guillaume Meon

Université Libre de Bruxelles (ULB); Université Robert Schuman Strasbourg III

Abstract

This paper investigates the consequences of elections on the capacity of governments to defend a fixed parity in the presence of output shocks. It demonstrates that the political uncertainty associated with elections may significantly modify the reactions of governments in a way that may be interpreted as opposite to their ideology. It also shows that the probability that a devaluation occurs increases significantly after an election.

JEL Classification: D78, E61, F33, F41

Suggested Citation

Meon, Pierre-Guillaume, A Model of Exchange Rate Crises with Partisan Governments. Available at SSRN: https://ssrn.com/abstract=271085

Pierre-Guillaume Meon (Contact Author)

Université Libre de Bruxelles (ULB) ( email )

CP 132 Av FD Roosevelt 50
Brussels, Brussels 1050
Belgium

Université Robert Schuman Strasbourg III ( email )

47, Avenue de la Foret-Noire
Institut d'Etudes Politiques
67082 Strasbourg Cedex
France
33 3 88 41 77 21 (Phone)
33 3 88 41 77 78 (Fax)

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