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Relating debt and currency crises -- towards a general equilibrium approach

Angelique Herzberg·Frederik S Herzberg
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Abstract

This short paper proposes a simple general equilibrium approach within a Markov-switching regime to explain how asymmetric information between lenders and speculators may lead to currency crises. The paper concludes by providing necessary as well as sufficient conditions for special cases.

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Angelique Herzberg, Frederik S Herzberg. 2011-08-26. Relating debt and currency crises -- towards a general equilibrium approach. https://arxiv.org/abs/math/0606117

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