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Chapter three empirically tests the effectiveness of interest rate defenses against speculative attacks. It is shown that previous empirical studies on this issue suffer a classic sample selection problem by restricting their sample observations to crisis periods only. To correct this selectivity bias, I employ the full information maximum likelihood method to a large unbalanced panel dataset that covers both crisis periods and peaceful periods. I also develop a rare-events-corrected probit model with sample selection that can be used to correct a second bias that is created by the rare events data used to estimate the selection equation. My empirical results show there is no significant statistical relationship between the interest rate and the outcome of a speculative attack. (Abstract shortened by UMI.)