Balance of Payments Crises

Описание к видео Balance of Payments Crises

This video gives a simple example of how balance of payments crises occur. Without too much details it shows that an economy where the domestic government is financing its deficit with money creation will lose reserves at a constant rate until speculators see the end of the regime getting near, then the whole thing speeds up and the regime collapses when reserves are essentially depleted. In the academic literature this would be considered a Generation 1 model.

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