ABSTRACT
Writing soon after the event, Paul Krugman accounted for the Mexican currency crisis of early 1995 as an instance of how the economic opinion of the day interacting with the workings of financial markets can at times generate a bubble. The economic opinion then current has been referred to as the ‘Washington consensus’. Washington was meant to capture not just the United States government,
but all those institutions and networks of opinion leaders centred in the world’s de facto capital-the International Monetary Fund, World Bank, think tanks, politically sophisticated investment bankers, and worldly finance ministers, all those who meet each other in Washington and collectively define the wisdom of the moment.
