A Large Poisson Currency Crises Game: Towards a Theory of Both the Onset and the Swiftness of Currency Attacks

Paper number: 00/15

Paper date: November 26, 2000

Year: 2000

Paper Category: Working Paper

Authors

Miltos Makrisy

Abstract

Existing models of self-fullling crises fail to explain both the onset and the abruptness of recent currency attacks. In this paper we follow the suggestion by Myerson (1998) that in games with a very large num- ber of players `a more realistic model should admit some uncertainty about the number of players in the game.' In particular, we build a Large Poisson Currency Crises Game which turns out to be consistent with sudden attacks and unique equilibrium.

A Large Poisson Currency Crises Game: Towards a Theory of Both the Onset and the Swiftness of Currency Attacks A Large Poisson Currency Crises Game: Towards a Theory of Both the Onset and the Swiftness of Currency Attacks