11. When a central bank devalues after a balance of payments crisis, it usually gains foreign reserves.

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11. When a central bank devalues after a balance of payments crisis, it usually gains foreign reserves. Can this capital inflow be explained using our model? What would happen if the market believed another devaluation was to occur in the near future?

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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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