01736cas a2200265 a 4500 AALejournalIMF000305 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451843361 1018-5941 BD-DhAAL BD-DhAAL Marion, Nancy. Policy Implications of "Second-Generation" Crisis Models / Nancy Marion, Robert Flood. Washington, D.C. : International Monetary Fund, 1997. 1 online resource (11 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students After the speculative attacks on government-controlled exchange rates in Europe and in Mexico, economists began to develop models of currency crises with multiple solutions. In these models, a currency crisis occurs when the economy suddenly jumps from one solution to another. This paper examines one of the new models, finding that raising the cost of devaluation may make a crisis more likely. Consequently, slow convergence to a monetary union, which increases the cost to the government of reneging on an exchange rate peg, may be counterproductive. This conclusion is exactly the opposite of that obtained from earlier models. Mode of access: Internet Mexico imf Flood, Robert. IMF Working Papers; Working Paper ; No. 1997/016 Full text available on IMF http://elibrary.imf.org/view/journals/001/1997/016/001.1997.issue-016-en.xml IMF e-Library