Understanding and modeling currency crises and contagion

Maria C. Molina


Approximately four trillion dollars and 143 currencies trade daily in the foreign exchange market, making it the largest market of the world. Sometimes there are crises in these markets. This thesis will explain currency crises and model how they move from country to country producing what economists call contagion. The author will discuss a case study and use a cellular automata model to explain and model currency crises and contagion.