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The purpose of this thesis is to analyse if there are any changes in the inflow of Foreign Direct Investments before, during and after a currency crisis. The thesis is based on a theoretical framework and has an empirical part, which use a regression equation. The theoretical framework presents a foundation of the incentives to mak FDI investments and the implications for a host country. Together with the possible link to the level of the real exchange rate in the host country, this thesis, based partly on previous paper written on the subject, presents a regression equation for an empirical analysis. The regression equation is based on a hypothesis about the changes in FDI inflow before, during and after the occurrence of a currency crisis in the host country. The empirical analysis presents different results concerning the link between FDI and a currency crisis. The hypothesis stated in the thesis is that a currency crisis influences FDI inflows. This hypothesis is rejected. Moreover, a currency crisis can have both positive and negative effects on the inflow of FDI for the selected countries. Results find further no similarities in regions or year of occurrence of the currency crises. The depth, length and structure of each currency crisis together with using the right definition of a currency crisis are two important factors relating to the outcomes in this study.

<p>The purpose of this thesis is to analyse if there are any changes in the inflow of Foreign Direct Investments before, during and after a currency crisis. The thesis is based on a theoretical framework and has an empirical part, which use a regression equation.</p><p>The theoretical framework presents a foundation of the incentives to mak FDI investments and the implications for a host country. Together with the possible link to the level of the real exchange rate in the host country, this thesis, based partly on previous paper written on the subject, presents a regression equation for an empirical analysis. The regression equation is based on a hypothesis about the changes in FDI inflow before, during and after the occurrence of a currency crisis in the host country.</p><p>The empirical analysis presents different results concerning the link between FDI and a currency crisis. The hypothesis stated in the thesis is that a currency crisis influences FDI inflows. This hypothesis is rejected. Moreover, a currency crisis can have both positive and negative effects on the inflow of FDI for the selected countries.</p><p>Results find further no similarities in regions or year of occurrence of the currency crises. The depth, length and structure of each currency crisis together with using the right definition of a currency crisis are two important factors relating to the outcomes in this study.</p>

Crises in emerging markets during the 1990’s pose a challenge to understand why economies with apparently strong fundamentals did face severe devaluations and severe disruption in their functioning. We study three different aspects of crises: i) Contagion is defined as the possibility of a domestic financial or currency crisis to spread to other countries. We study the 1990’s crises and introduce a new measure for defining financial crises and isolating their impact on currency crises and vice versa; ii) During the 1990’emerging countries in crises suffered severe adjustments in the level of consumption. We build on Lucas’s measure of welfare loss and derive a more comprehensive measure that includes: total loss; loss related to changes in consumption growth rate; to volatility of consumption; and, to changes in the level of consumption; iii) Trying to explain the behaviour of consumption after crises in emerging markets during the 1990’s we found contradicting theoretical approaches and empirical results. We solve the model of intertemporal maximisation of consumption assuming that agents maximise over several periods at a time. We extend the intertemporal framework to include the decision of participating not only in the loanable funds market but in other financial assets and derive the solution for a stock market. The results imply an alternative to the specification of the Euler equation for consumption with more explanatory variables previously omitted.

[pt] O principal objetivo da dissertação é analisar crises de realinhamento da taxa de câmbio real. O modelo desenvolvido relaxa a hipótese da PPP, que é usual nos modelos de crises cambiais, e assume que o desequilíbrio da taxa de câmbio é derivado de choques exógenos no balanço de pagamentos. Este tipo de abordagem permite explicar crises que não são derivadas da adoção de políticas inconsistentes com o regime cambial fixo e sim resultado do processo de ajuste da economia. Um aspecto fundamental do modelo é a importância do grau de comprometimento do governo em relação ao câmbio fixo. A adoção de regimes de câmbio fixo com altos custos de saída, como o currency board, pode ser racionalizada através de um modelo simples como o apresentado. / [en] The main objective of this dissertation is to analyze real exchange rate realignment crises. The model developed abandons the PPP hypothesis, which is common in the exchange rate crises models, and assumes that disequilibrium of the exchange rate is derived from exogenous shocks at the balance of payments. This type of approach allows us to explain crises that are not derived from the adoption of policies that are inconsistent with the fixed parity, but result from the process of adjusting the economy. A fundamental aspect of the model is the importance of the degree of commitment of the government in respect to the parity. The adoption of regimes of fixed exchange rate with high costs of exit, as currency boards, can be rationalized through a simple model as the one presented below.

The German Central Bank, or Bundesbank, has since its founding in postwar West Germany been committed to the maintenance of a stable, conservative monetary policy to control the German economy. During moments key in the process of European integration, the bank has worked to delay and reframe the integration process in order to best benefit the German economy. This study examines four such moments, beginning with the collapse of the Bretton Woods system and ending with the Greek bailouts of 2010, to examine the Bundesbank’s influence, both domestically and internationally, in determining the framework of the current European Union and its monetary policy.

The main goal of this paper is to provide complete view about financial crises. Paper is di-vided into the six chapters whereas we explore the definition of crises, than history, causes, indicators and anti-crisis precautions. In last chapter we apply all theoretical observations to case study of Nordic banking crises from the beginning of the 90s in last century. We can't expect the crises to vanish completely because they are natural part of both finan-cial system and whole economy but for which they are extremely dangerous too and that's why the crisis, when it breaks out, must be at every moment managed and under control.

By using statistical methods and methods of macroeconomic analysis it has been proved that Schumpeter's theory of the creative destruction works not only as a theoretical model but it holds true even in real economics. With these methods it has been proved that during the currency and economic crisis in the 1997 and following the creative destruction was present in Czech economy and that it has changed the economy to be more effective and more productive than it was before which has helped to reach steeper growth rate afterwards. This means that the crisis through the creative destruction in fact has improved a condition of the whole Czech economy. Such an improvement has been also proved by an international comparison with the economy of the Slovak republic where the creative destruction didn't act so much due to an absence of economic crisis.

Thesis advisor: Zhijie Xiao / This paper attempts to deliver a side-by-side examination of the similarities and differences between the economies of East Asia (Singapore, Taiwan, Hong Kong, Korea Republic, Thailand, Malaysia, Indonesia, and the Philippines) and China. After the devastating 1997 Crisis, many investing eyes have turned to China as the next Asian growth engine. China has been opening its economy to foreign investors and its accession into the World Trade Organization will push for increased transparency and efficiency. The paper discusses the internal and external forces that drove the economies, with focused attention on its financial systems, using pre-crisis data. With foreign banks allowed entry into China by the end of 2006, its financial system will be an important component in economic longevity. Lastly, the question of whether or not China is vulnerable to a crisis is assessed based on the same factors that caused it in East Asia. / Thesis (BA) — Boston College, 2006. / Submitted to: Boston College. College of Arts and Sciences. / Discipline: Economics Honors Program. / Discipline: College Honors Program.

[pt] Na literatura é quase unânime a rejeição da relação de paridade descoberta das taxas de juros (PDJ). Isto significa que existiriam retornos excessivos previsíveis para a especulação cambial. Esta dissertação documenta os retornos das taxas de juros em regimes de câmbio controlado em diversos episódios. As evidências apontam que esses regimes terminam não só com abrutas depreciações, mas também que essas depreciações, na grande maioria dos casos, superam o diferencial de juros acumulados desde o início do regime. Ou seja, nesses casos não haveriam retornos excessivos como indicado pelos testes usuais da PDJ. Identificamos as variáveis que prevêm a magnitude da variação cambial ocorrida após a flexibilização do regime cambial. Em seguida, analisamos o retorno da estratégia de carry trade por tipo de regime cambial concluindo que nos regimes de câmbio controlado o retorno esperado é maior mas o downside risk também. / [en] The failure of uncovered interest rate parity is almost unanimous in the literature. The consequence is the existence of predictable excess returns to currency speculation. This paper documents the returns to the carry trade strategy in fixed exchange rate regimes in a set of episodes. Empirical documentation shows not only that these regimes end in abrupt depreciation but also that the depreciation generally wipes out the entire accumulated interest rate differential during all the period. This anecdotal evidence contrasts to that commonly found by uncovered interest parity tests. We identify the leading indicators to the currency crises magnitudes. We also analyze the differences in returns to the carry trade strategy by currency regimes founding that both the expected return and the downside risks are greater in fixed currency regimes.