A small open economy is initially in trade balance. There is a temporary increase in household income
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A small open economy is initially in trade balance. There is a temporary increase in household income for one period (i.e. rise in \(\widetilde{y}_{t}\) ). What effect does this have on the current account in period \(t\) and the following periods? Does this story change if the increase in income is permanent?
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Macroeconomics Institutions Instability And The Financial System
ISBN: 9780199655793
1st Edition
Authors: Wendy Carlin, David Soskice
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