18. In the Case Study on international reserves (pp. 563567), we asserted that except in the case...

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18. In the Case Study on international reserves (pp. 563–567), we asserted that except in the case of a reserve currency system, an attempt by all central banks simultaneously to raise their international reserve holdings through open-market sales of domestic assets could have a contractionary effect on the world economy. Explain by contrasting the cases of a gold standard–type system and a reserve currency system.

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International Finance Theory And Policy

ISBN: 9781292238739

11th Global Edition

Authors: Paul R. Krugman, Maurice Obstfeld, Marc Melitz

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