Explain them using simple demand-supply model

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Reference no: EM131107376

The emerging markets elected to accumulate vast sums of foreign assets in the 2000s.

Question:

a. How did (real) interest rates evolve over this period?

b. How can one explain them using a simple demand-supply model? [Hint: Saving is supply of capital, investment is demand for capital].

Reference no: EM131107376

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