international monetary systems: An historical overview, Macroeconomics

#question.Q8. In 1961, Germany faced the dilemma of an external surplus and a booming economy. As a result, speculative capital flowed into Germany and the Germans felt obliged to revalue their currency (rather than to devalue it).
Can you describe how such a “revaluation crisis” or “inflow attack” might operate when the government (like Germany’s at the time) is highly fearful of inflation? The reasoning is different from that underlying the devaluation crisis discussed in chapter 18, because interest rates are pushed down by speculators and there is no danger of running out of foreign reserves.
This is for Paul Krugman''s book international economics theory & policy chpt 19
Posted Date: 9/20/2012 3:15:31 PM | Location : United States

Related Discussions:- international monetary systems: An historical overview, Assignment Help, Ask Question on international monetary systems: An historical overview, Get Answer, Expert's Help, international monetary systems: An historical overview Discussions

Write discussion on international monetary systems: An historical overview
Your posts are moderated
Related Questions
On the next page is a graph of a labor market in equilibrium, with market clearing values of wages and hours of employment being W 1 and E 1 respectively.  a.  The Federal gov

Can the government always reduce the budget deficit by simply increasing taxes? Why or why not? Please explain your answer using the Laffer curve. In addition, use research and sho

Firms such a Moody's and Standard & Poor's study corporations that issue bonds. They publish "ratings" for the bonds- evaluation of the likelihood of default. Suppose these rating

GKX Industries expects sales of its hydraulic seals (in inch and metric sizes) to increase according to the cash flow sequence $70+4k, where k is in years and cash flow is in $1000

An advantage of observing statistics from this range is that it encapsulates both positive and negative performances of the economy helping to produce a much more accurate insight

ACCOUNTING SYSTEM-EXAMPLE I  Consider a very simple economy. It consists of a. A number of households. b. A single productive organization, a 'firm' - say the Jam Corpora

Would it be more efficient if more firms could produce Vista? Would Microsoft have spent the money to develop Vista if it didn't hold a patent--that is, if once it developed Vista,

If a firm wants to sell goods more often, would they prefer to produce a high quality good that will not wear out or one that will wear out faster. For example, what is the 'life e

Aggregate supply Remember that labor demand provides us profit-maximizing quantity of L for a given real wage. If W/P is given (as it's in cross model), we can find profit-maxi