Chapter

Sunspot-Based Models

Michael Chui and Prasanna Gai

in Private Sector Involvement and International Financial Crises

Published in print January 2005 | ISBN: 9780199267750
Published online July 2005 | e-ISBN: 9780191602504 | DOI: http://dx.doi.org/10.1093/0199267758.003.0003
Sunspot-Based Models

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Articulates second-generation (sunspot) models of financial crisis, and highlights the important role of coordination problems in these models. The seminal currency crisis model of Obstfeld (1996) and the bank run model of Diamond and Dybvig (1983) are presented in detail.

Keywords: bank runs; coordination problems; currency crises; second-generation crisis models; sunspots

Chapter.  4051 words.  Illustrated.

Subjects: Financial Markets

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