During the 1990s and the 2000s a variety of crises affected the stability of international capital markets: from the European Monetary System crisis in 1992-93 and the emerging market crises to today’s financial crisis have been present in the arenas of capital markets. These crises stimulated the theoretical and empirical literature on the economics of the crises in several ways, among other things on the determinants of a crisis, its impact on domestic output, and policy implications. In most of the recent crises public sector financing difficulties combined with currency problems dominated the collapse of these countries. Both unsustainable fiscal and monetary policies were important factors behind these crises (...)