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| Author: | Corsetti, G. Mackowiak, B. |
| Title: | Fiscal imbalances and the dynamics of currency crises |
| Journal: | European Economic Review
2006 : JUL, VOL. 50:5, p. 1317-1338 |
| Index terms: | crises currency |
| Language: | eng |
| Abstract: | This paper combines the fiscal theory of the price level (FTPL) and the first generation models after Krugman (1979) in order to develop a framework to examine the fiscal dimension of currency crises. By using the framework, the authors show how external nominal shocks can lead to a fiscal imbalance and affect currency stability. |
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