=+crisis or inflow attack might operate when the government (like Germanys at the time) is highly fearful

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=+crisis” or “inflow attack” might operate when the government (like Germany’s at the time) is highly fearful of inflation? The reasoning is different from that underlying the

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International Economics

ISBN: 9780132146654

9th Edition

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

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Question Posted: Oct 02, 2024 04:00 AM

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=+crisis or inflow attack might operate when the government (like Germanys at the time) is highly fearful of inflation? The reasoning is different from that underlying the
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=+permanently to a higher level of wages and prices. With a fixed exchange rate, there is thus no way of keeping wages and prices down. What is wrong with this argument?
=+devaluation crisis discussed in Chapter 18, because interest rates are pushed down by speculators and there is no danger of running out of foreign reserves.
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=+crisis or inflow attack might operate when the government (like Germanys at the time) is highly fearful

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International Economics

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