The box on pages 450451 suggested that even when a fiscal expansion is permanent, market actors might

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The box on pages 450–451 suggested that even when a fiscal expansion is permanent, market actors might expect that, because of the resulting rise in the current account deficit, some part of the initial currency appreciation is temporary. If so, how would this affect your view of the short-run effects of permanent fiscal expansion?

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International Economics Theory and Policy

ISBN: 978-0273754206

9th Edition

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

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