Working Paper

The Mexican Peso Crisis

Published on 1 January 1996

This paper analyses the causes of the 1994 Mexican peso crisis. Consensus is emerging that the large current account deficit, largely funded by short-term capital inflows, was one of the main factors underlying the crisis.

The study concludes that two other factors were also important – the speed of market liberalisation in Mexico, and imperfections in international capital markets, which can lead to huge over-reactions to relatively small changes in countries’ economic fundamentals. OUT OF PRINT

Publication details

Griffith-Jones, S.
1 85864 034 2


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