The potential financial vulnerability that can occur when private sector or government agents acquire high levels of foreign currency debt has been at the center of discussion since the financial crises that affected the countries of Southeast Asia in the late 1990s. To the extent that a mismatch is ...

A characteristic of the current crisis in Europe is that countries in its periphery have found themselves increasingly cut off from international financial markets. In the present study we ask how such changes in the financial structure influence the welfare consequences of maintaining a fixed exchange ...