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Second Topic: Do exchange rates reflect fundamentals? - Friedman (1953): speculators buy low and sell high ensures FX reflects fundamentals - Nurske (1944): Destabilizing speculation,

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Second Topic: Do exchange rates reflect fundamentals? - Friedman (1953): speculators buy low and sell high ensures FX reflects fundamentals - Nurske (1944): Destabilizing speculation, excess volatility. - F&T: 65% appreciation in the USD in the 1980s was temporary

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