Prospective deficits and the Asian currency crisis
By: Craig Burnside, Martin Eichenbaum, and Sergio Rebelo.
Contributors: Eichenbaum, Martin S.; Rebelo, Sergio.; World Bank. Development Research Group. Macroeconomics and Growth.
Series: Policy research working paper ;; 2174; Policy research working papers ;; 2174.
Publisher: World Bank, Development Research Group, Macroeconomics and Growth
Published: 1999
Place of publication: Washington, DC
Language: eng
Number of pages: 43
Subjects: Financial crises -- Asia -- Econometric models.; Banks and banking -- Asia -- Econometric models.; Budget deficits -- Asia -- Econometric models.
Description: The recent Asian currency crisis was caused by large prospective fiscal deficits associated with implicit bailout guarantees to failing banking systems.  Absent the political will to raise taxes or cut spending, governments must resort to seignorage revenues to pay for the bailout of the banking system.  In a world of forward-looking agents, this makes a currency crisis inevitable.
Notes: Includes bibliographical references (p. 40-42).
"September 1999"--Cover.
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