Sources of Currency Crisis: An Empirical Analysis

Two types of currency crisis models coexist in the literature: first generation models view speculative attacks as being caused by economic fundamentals which are inconsistent with a given parity. Second generation models claim self-fulfilling speculation as the main source of a currency crisis. Recent empirical research in international macroeconomics has attempted to distinguish between the sources of currency crises. This paper adds to this literature by proposing a new empirical approach to identifying the speculative and fundamental components of currency crises in the context of a structural vector autoregression model. Our results suggest that only for the French franc can a substantial speculative component be identified as a potential source of the 1992-93 ERM crisis.exchange rates, speculation, fundamentals, currency crisis, purchasing, power parity, structural vector autoregression, impulse response

A Network Worm Vaccine Architecture

The ability of worms to spread at rates that effectively preclude human-directed reaction has elevated them to a first-class security threat to distributed systems. We present the first reaction mechanism that seeks to automatically patch vulnerable software. Our system employs a collection of sensors that detect and capture potential worm infection vectors. We automatically test the effects of these vectors on appropriately-instrumented sandboxed instances of the targeted application, trying to identify the exploited software weakness. Our heuristics allow us to automatically generate patches that can protect against certain classes of attack, and test the resistance of the patched application against the infection vector. We describe our system architecture, discuss the various components, and propose directions for future research