Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/18288 
Authors: 
Year of Publication: 
2002
Series/Report no.: 
DIW Discussion Papers No. 304
Publisher: 
Deutsches Institut für Wirtschaftsforschung (DIW), Berlin
Abstract: 
This study argues that the political considerations were an important factor behind the crisis of the Brazilian real in January 1999. The divided coalition government and a president facing impending elections eschewed the correction of external misalignments and the fiscal austerity at a time when the markets were already excited by the 1997-98 East Asian and 1998 Russian financial crises. The hypothesis is established after confirming the vulnerability of Brazilian economy to currency crisis through Masson's model of multiple equilibrium and then it is tested by running a maximum likelihood logit regression.
Document Type: 
Working Paper

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