| Summary: | <p> Some recent articles explain the Asian crisis almost exclusively in terms of "fundamentals". The role played by private sector's expectations, however, should also be considered. In my view, then, "escape clause" models exhibiting multiple equilibria within a grey area, especially when integrated with the possibility that expectations may change exogenously so as to modify the grey area itself, allow a better understanding of exchange rate crises. When considering the role played by expectations, the economic policy measures to be adopted in order to assure the stability of financial and currency markets differ from the remedies emerging when those aspects are ignored. </p><p> </p><p> </p><p><strong>JEL Codes: </strong>F31, F32</p><p><strong>Keywords:</strong> Crisis, Exchange Rates</p>
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