3. Continue with the last question. Imagine that in Italy the interest rate on five-year government bonds

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3. Continue with the last question. Imagine that in Italy the interest rate on five-year government bonds was 11 percent per annum; in Germany the rate on five-year government bonds was 8 percent per annum. What would have been the implications for the credibility of the current lira/DM exchange parity?

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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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