TY - BOOK ID - 84539299 TI - Collapse of a Crawling Peg Regime in the Presence of a Government Budget Constraint PY - 1991 SN - 1462347010 1455297909 1281992259 9786613794796 1455270547 PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Foreign Exchange KW - Money and Monetary Policy KW - Public Finance KW - Monetary Policy, Central Banking, and the Supply of Money and Credit: General KW - Debt KW - Debt Management KW - Sovereign Debt KW - Development Planning and Policy: Trade Policy KW - Factor Movement KW - Foreign Exchange Policy KW - Currency KW - Foreign exchange KW - Monetary economics KW - Public finance & taxation KW - Domestic credit KW - Exchange rate arrangements KW - Government debt management KW - Managed exchange rates KW - Exchange rate policy KW - Credit KW - Debts, Public UR - https://www.unicat.be/uniCat?func=search&query=sysid:84539299 AB - This study extends the research on balance-of-payments crises by investigating the dynamics of the collapse of a crawling exchange rate in the presence of an explicit link between the fiscal deficit and domestic credit. It shows that such an exchange rate regime is characterized by two potential steady-state equilibria. This introduces an ex-ante indeterminacy regarding the timing and magnitude of the speculative attack on international reserves in the event of a sustained inconsistency between the country’s fiscal and exchange rate policies. The paper discusses the conditions that would define the actual timing of the regime’s breakdown. ER -