01725cas a2200253 a 4500 AALejournalIMF008905 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451862249 1018-5941 BD-DhAAL BD-DhAAL Diks, Cees. The Role of Domestic and Foreign Investors in a Simple Model of Speculative Attacks / Cees Diks, Dennis Botman. Washington, D.C. : International Monetary Fund, 2005. 1 online resource (24 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 We introduce local and foreign investors in a simple model of speculative attacks. Local investors have less tolerance for overvaluation of the fixed exchange rate because they tend to incur lower costs when taking a short position and possess better information, and because of moral hazard created by discriminatory government guarantees. On the other hand, the prospect of higher taxation after a balance of payments crisis deters speculation by locals compared to foreign investors. Finally, the lower the degree of exchange rate pass-through, the more likely domestic investors are tp take the lead during capital flight. Mode of access: Internet Botman, Dennis. IMF Working Papers; Working Paper ; No. 2005/205 Full text available on IMF http://elibrary.imf.org/view/journals/001/2005/205/001.2005.issue-205-en.xml IMF e-Library