Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/211511
Authors: 
Willman, Alpo
Year of Publication: 
1988
Series/Report no.: 
Bank of Finland Discussion Papers 8/1988
Abstract: 
In this paper balance-of-payments crises are studied in a framework in which investors do not know the threshol~ level of foreign reserves, the attainment of which implies that the central bank abandons its fixed exchange target. Investors are alternatively risk neutral or risk averters. It is shown that, depending on whether the threshold level is stochastic or fixed but unknown to investors, currency speculation reveals itself as, respectively, a speculative outflow distributed over a longer time period or a sudden speculative attack on the currency.
Persistent Identifier of the first edition: 
ISBN: 
951-686-151-2
Document Type: 
Working Paper

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