Financial Crises and the Politics of Macroeconomic Adjustments

What is it about?

This book examines why states respond differently to balance-of-payments crises, which often take the form of currency and/or debt crises. It argues that societies differ in how vulnerable they are towards the main crisis resolution strategies: external adjustment, especially exchange-rate devaluation, or internal adjustment, i.e. austerity and structural reforms. Delay, foreign support, and political conflict are most likely to occur in those countries where voters and firms are vulnerable to any type of policy adjustment and reform. The book includes analyses of individual and firm preferences about adjustment strategies and case studies of policy responses to financial crises in Asia and Eastern Europe.

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