02286cas a2200253 a 4500 AALejournalIMF003790 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451921571 1018-5941 BD-DhAAL BD-DhAAL Pazarbasioglu, Ceyla. Exchange Market Pressures and Speculative Capital Flows in Selected European Countries / Ceyla Pazarbasioglu, Inci Otker. Washington, D.C. : International Monetary Fund, 1994. 1 online resource (72 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 This paper estimates a speculative attack model of currency crises in an attempt to identify the roles of macroeconomic fundamentals and speculative market pressures in the recent crisis, as well as earlier devaluations in adjustable fixed exchange rate systems in the European currency markets. For a sample of five countries, including Denmark, Ireland, Spain, Norway, and Sweden, our empirical analyses show that both economic fundamentals and speculative factors have a significant influence on the probability of devaluations. The recent experience in the European foreign exchange markets suggests that the latest realignments are mainly the result of foreign exchange market tensions amidst the growing conflict between the needs of the domestic economies and the policies needed to maintain fixed exchange rates. Our results confirm that regardless of the source of the deterioration in economic conditions, market participants perceived the existing parities of the currencies in these five countries as inconsistent with their underlying economic fundamentals, thus effectively bringing about either a realignment or a modification of the exchange arrangement. Mode of access: Internet Otker, Inci. IMF Working Papers; Working Paper ; No. 1994/021 Full text available on IMF http://elibrary.imf.org/view/journals/001/1994/021/001.1994.issue-021-en.xml IMF e-Library