Exercise 4 Answer what the following items request.

a. Explain the break of the Bretton Woods regime under the perspective of the firstgeneration currency crisis model seen throughout this chapter. (Review the description of the regime in Box 6.1.)

b. With a graph, present the evolution of the yen/dollar exchange rate, of international reserves and the balance sheet of the Bank of Japan, before and after the end of Bretton Woods. Do the trajectories follow the pattern predicted by the theory? Explain your answer.

c. Explain the break of the Argentine currency board regime in 2001 using the exchange rate crisis models seen in this chapter.

d. With a graph, present the evolution of the peso/dollar exchange rate, of international reserves and the balance sheet for the Banco Central de la República Argentina before and after the end of currency board regime. Do the trajectories follow the pattern predicted by the theory? Are trajectories similar to those in item

(b) seen? Explain your answer.

Chapter 9 • Currency Crises 259