Customer Reviews

Currencies and Crises

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Paul Krugman's "Currency and Crises" is a collection of 11 academic essays on international monetary economics written between the late 1970's and 1980's. The four sections include; 1) Exchange Rates and the Balance of Payments, 2) Speculation and Exchange Rates, 3) The Debt Crisis and Its Aftermath, and 4) The International Monetary System. Each essay is particularly focused on theory rather than empirical analysis.

While in some ways his essays seem dated they mostly stand the test of time. While his emphasis on Japan turned out to be misplaced it is now relevant for China (See Essay #2). At the time Krugman was very concerned with drastically increasing fiscal deficits. It turns out his advice is still pertinent as the 2000's saw an even greater explosion of debt when the economy was at potential (and crowding out as a result). His models on currency speculation, debt forgiveness, and the problems of monetary union all have come to be standard economics.

It is somewhat surprising how conservative his "International Economics: Theory and Policy" is compared to his academic essays. By first reading his textbook I expected him to be far more middle-the-road then his essays suggest. His essays have clear policy recommendations and in some essays, like international debt relief, are quite controversial for the time (but proved correct in hindsight).

"Currency and Crises" is a great collection of essays for anyone who wishes to know more about the theory behind international monetary economics.

Paul Krugman first caught my attention many years ago for the precision and bluntness of his analysis of causal factors behind the Latin American debt crisis. At that time, I was a senior executive engaged in international banking, and found his writings to be compelling. Krugman's evaluation of indigenous and exogenous forces that influence currency fluctuations and economies around the world remains at a high level, as demonstrated in "Currencies and Crises". I currently teach a course at a graduate school of business administration titled "Managing Risk for a Global Enterprise", and will make "Currencies and Crises" required reading. Krugman has not lost his edge. His writings are comprehensive, crisp, clearly written and his findings are evidence based.

Paul is one of the famous personalities in the world of finance. Any person who has not heard of him has got no right to be in the field of finance. For most of the Fortune 500 corporation in US, about 70-80% of revenues is coming from abroad(read foreign currency). By reading this book one gets a real perspective on the latest things happening in the field of foreign currency.