Trust In A Social Theory Of Currency Crises As Applied To Currency Boards

Abstract

The conventional explanations of currency crises have not proved fruitful .Aykens (2005) proposes a social theory of currency crises which he shows is able to account for the interwar gold standard crisis. In this paper we explain the elements of Aykens’ theory, propose a brief extension of it and demonstrate with respect to currency boards, specifically those of Bosnia-Herzogovina and of Argentina both how affective trust is achieved and also how it is destroyed.