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In times of uncertainty, many investors around the world seek to hold safe assets like U.S. government bonds. Suppose uncertainty caused by the world pandemic
In times of uncertainty, many investors around the world seek to hold safe assets like U.S. government bonds. Suppose uncertainty caused by the world pandemic leads to capital flow into the U.S. Using our long run model of a large open economy, what would you expect to be the impact of this capital flow on U.S. national savings, investment, net exports, real interest rate, and the real exchange rate?
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