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What is the economic purpose of a speculative attack? By that I mean, what function in the broader international economy does this mechanism serve? Does

  1. What is the economic purpose of a speculative attack? By that I mean, what function in the broader international economy does this mechanism serve? Does it have any positive effects?
  2. Is there a case against allowing bond-holders or other market forces to influence policy decisions by creating potential exchange rate instability? Should policymakers take such bondholders actions into account when engaging in policy?

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