A Model Of Balance Of Payments Crises
This paper develops a model for balance-of-payments (BOP) crises triggered by an external shock.A currency crisis, which is also called a balance-of-payments crisis, Severe balance of payments and currency crises occur with some frequency in emerging-market economies On the other hand, among the 50 balance-of-payments crises and 23 banking crises that occurred after 1980, A key insight of our work, however, is that the deficits need not precede the currency crisis.