The textbook examines what happens when governments run persistent budget deficits in a first-generation model. Suppose that

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The textbook examines what happens when governments run persistent budget deficits in a first-generation model. Suppose that a country begins running large budget surpluses. In this case, will the country be forced to float? In the forward-looking model, is a speculative attack possible in this case? Explain.

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International Economics

ISBN: 9781319218508

5th Edition

Authors: Robert C. Feenstra, Alan M. Taylor

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