I construct a simplified but complete version of Krugman (1999) model, derive a closed-form solution, and make sure that there are two dynamic equilibria, one of which is the steady-growth one and the other of which is the currency-crisis one accompanied by balance-sheets crisis as Krugman suggested. I examine conditions for the existence of self-fulfilling crisis equilibrium and find that an economy may be faced with such crises if (1) propensity to import is low, (2) propensity to consume is low, (3) world interest rate is low, (4) borrowing constraint of private sector is moderate, (5) financial market is restrictive and there is high entry barrier, (6) price elasticity of export is low, and (7) wage elasticity of labor supply is low. I also show how the excess liabilities cause a large but temporal depreciation of exchange rate inevitably in the model. Tightening monetary policy aiming to avoid a sharp depreciation of nominal exchange rate causes a deflation and makes the balance-sheet problem worse. Expansionary fiscal policy can avoid the crisis only if the government raises a sufficient fund from abroad, but the required amount of fund may be extraordinary large if the borrowing constraint is moderate.