BOFIT Discussion Papers, Institute for Economies in Transition, Bank of Finland
No 1/1999:
Currency Crisis Theories – Some Explanations for the Russian Case
Tuomas Komulainen ()
Abstract: The paper examines currency crisis theories and applies
them in searching for the main causes of the Russian crisis. We first study
the determination of the exchange rate and then the first and second
generation theories on currency crisis and finally the recent theoretical
discussions of the Asian crisis. The main reason for the Russian crisis was
the long-standing federal budget deficit. During the last years the
deficits were financed mainly via short-term domestic debt. This created
expectations of government insolvency and central bank financing. Moreover,
the Russian economy has its own basic weaknesses, which render the country
incapable of growth and prone to crisis. The Asian crisis was a trigger for
the Russian crisis. Lower prices for Russian export products, inadequate
financial regulations and lack of information in emerging markets in
general are factors explaining this contagion effect. But the main mistakes
that led to the crisis were those of the Russians themselves - the federal
budget deficits. Thus the repair work should also start from there.
Keywords: currency crisis; Russia; budget; contagion; (follow links to similar papers)
45 pages, October 30, 1999
Before downloading any of the electronic versions below
you should read our statement on
copyright.
Download GhostScript
for viewing Postscript files and the
Acrobat Reader for viewing and printing pdf files.
Full text versions of the paper:
dp0199.pdf 
Download Statistics
Questions (including download problems) about the papers in this series should be directed to Päivi Määttä ()
Report other problems with accessing this service to Sune Karlsson ()
or Helena Lundin ().
Programing by
Design by Joachim Ekebom
