Contagious Currency Crises

Eichengreen, Barry; Rose, Andrew Kenan; Wyplosz, Charles

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Contagious Currency Crises

54 Pages Posted: 18 Nov 2001

See all articles by Barry Eichengreen

Barry Eichengreen

University of California, Berkeley; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Andrew Kenan Rose

University of California - Haas School of Business; NUS Business School; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR)

Charles Wyplosz

University of Geneva - Graduate Institute of International Studies (HEI); Centre for Economic Policy Research (CEPR)

There are 2 versions of this paper

Date Written: August 1996

Abstract

This paper is concerned with the fact that the incidence of speculative attacks tend to be temporally correlated; that is, currency crises appear to pass 'contagiously' from one country to another. The paper provides a survey of the theoretical literature, and analyses the contagious nature of currency crises empirically. Using 30 years of panel data from 20 industrialized countries, we find evidence of contagion. Contagion appears to spread more easily to countries that are closely tied by international trade linkages than to countries in similar macroeconomic circumstances.

Keywords: Channels, data, international, macroeconomic, panel, similarity, speculative, trade

JEL Classification: F31

Suggested Citation: Suggested Citation

Eichengreen, Barry and Rose, Andrew Kenan and Rose, Andrew Kenan and Wyplosz, Charles, Contagious Currency Crises (August 1996). Available at SSRN: https://ssrn.com/abstract=291182