Policy choices in tough times

The case of democratization and currency defense

Bibliographic Data

ID6299353
AuthorsByunghwan Son (0000-0003-0163-6986, George Mason University, corresponding author)
Year2016
Volume37
Issue4
Pages453-469
Publication date2016-09-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueInternational Political Science Review (JOURNAL)
Journal identifiersISSN: 0192-5121 • E-ISSN: 1460-373X
PublisherSAGE Publications Inc (PUBLISHER)
DOI10.1177/0192512115587928
OpenAlexW2509638181
LanguageEN
Citations received2
References cited51

Do policymakers under financial and political distress make undesirable policy choices? This paper attempts to answer this question by studying the relationship between democratization and currency devaluation under speculative pressures. The central argument is that young democracies exhibit relatively high probabilities of succumbing to speculative attacks, as the political cost of economic adjustment needed for defense is relatively high for these nascent regimes. The paper further contends that this relationship is stronger when the regime can mobilize fewer resources to defend their currencies. To test these arguments, this paper uses monthly data for 117 countries from 1975 to 2008. The results from statistical analysis provide corroborative evidence for these arguments

Argument (complex analysis · Currency · Democracy · Democratization · Devaluation · Economics · International economics · Macroeconomics · Monetary economics · Political science · Politics · Positive economics · Regime change · Fiscal Policies and Political Economy · Fiscal Policy and Economic Growth · Global Financial Crisis and Policies · Law

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