10. Suppose the U.S. and Japanese governments both want to depreciate their currencies to help their tradables...

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10. Suppose the U.S. and Japanese governments both want to depreciate their currencies to help their tradables industries but fear the resulting inflation. The two policy choices available to them are (1) expansionary monetary policy and (2) no change in monetary policy. Develop an analysis like the one in the appendix to show the consequences of different policy choices. Can Japan and the United States do better by cooperating than by acting individually?

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International Economics Theory And Policy

ISBN: 9780321116399

6th Edition

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

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