Currency Crisis

• Main Author: Islam, Faridul (auth)
• Format: Electronic Book Chapter
• Language: English
• Published: MDPI - Multidisciplinary Digital Publishing Institute 2019
• Subjects: Special Drawing Rights (SDRs); banking crises; reserve currency; asymmetry; derivative; Asian crisis; policy uncertainty; monetary plurality; mortgage crisis; nonlinear ARDL; China; emerging market economies; exchange rates; default swap; LIBOR; currency; cash flow; Belt and Road Initiative; money demand; commodity price stabilisation; trade balance; risk management; Argentina; RMB internationalization; GMM; currency convertibility; investment; Grondona system; exchange rate disconnect puzzle; monetary policy; NARDL; Special Drawing Right; currency pegs; international monetary system; economic institutions; cointegration; macroeconomic fundamentals; currency crisis; the U.S.A.
• Online Access: DOAB: download the publication; DOAB: description of the publication

Financial crises are nothing new in the annals of history of the capitalistic path of economic development; indeed, they are part of business cycle. The theoretical basis for this is well entrenched in the concept of 'Keynesian Cross'. Tales of crises date back centuries, but have taken a new turn as the race for more globalization goes on, which involves liberalizing trade and opening up the financial sector. This has made many nations vulnerable to crises that are likely to be repeated, perhaps frequently. Based on recent experience, warning signs can be seen in the dollar-centric exchange rate, which is the mainstay for the stability of the current global financial system. To a careful observer, there is clearly fatigue in the system.