01716cas a2200253 a 4500 AALejournalIMF007339 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451929096 1018-5941 BD-DhAAL BD-DhAAL Masson, Paul. The Mexican Peso Crisis : Overview and Analysis of Credibility Factors / Paul Masson, Pierre-Richard Agenor. Washington, D.C. : International Monetary Fund, 1996. 1 online resource (36 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 examines credibility and reputational factors in explaining the December 1994 crisis of the Mexican peso. After reviewing events leading to the crisis, a model emphasizing the inflation-competitiveness trade-off is presented to explain the formation of devaluation expectations. Estimation results indicate that investors appear to have seriously underestimated the risk of devaluation, despite early warning signals. The collapse of confidence that followed the December 20 devaluation may have been the result of a shift in the perceived commitment of the authorities to exchange rate stability. Mode of access: Internet Agenor, Pierre-Richard. IMF Working Papers; Working Paper ; No. 1996/006 Full text available on IMF http://elibrary.imf.org/view/journals/001/1996/006/001.1996.issue-006-en.xml IMF e-Library