Product Market Deregulation and the U.S. Employment Miracle

Abstract

The paper by Corsetti et al. in this volume studies how the presence of large investors affects the nature of currency crises. Its motivation is the alleged prominent role that some hedge funds and investment banks have played in recent episodes of this sort. Regardless of whether this is factually correct or not, I am convinced the topic is of great interest. In my comment, I raise a few issues the paper either overlooks or does not treat with sufficient clarity. To illustrate them, I use a barebones version of the model that removes all uncertainty (public and private) about fundamentals.