| The dissertation consists on three chapters on currency crises. The first two studies analyze the short term consequences of currency attacks, as well as the effects of defensive monetary policies undertaken by central banks to defend the exchange rate, all of that in the perspective of differences in the degree of perceived institutional quality countries may have. The third study analyzes the long term consequences of currency crises, specifically whether their effects are transitory or permanent under the perspective of structural change.; Using very different techniques, the first two papers show that there are substantial differences in the degree of effectiveness of the possible avenues of defense depending on institutional quality. For the first paper, my results show evidence that Interest Rate Defense (IRD) may be effective in making currency attacks failing only in countries with low institutional quality. In a more comprehensive analysis, the second paper confirms these results, and shows that for countries with poor institutional quality, Interest Rate Defense (IRD) and Domestic Credit Defense (DCD), the two most commonly used avenues of defense, represent effective tools to deter speculation and defend a currency against attack, but the effects are very small.; In the third study, I find that currency crises have rather long run effects in the economy. The results suggest that about half of the currency crises for the last 42 years are related to a structural break. It was also found that for developed countries, movements in the level of non-gold reserves have a longer term impact in the economy than actual devaluations; the contrary is true for developing countries, for which devaluations seem to be the main tie to the long run. |
