Engel, Charles (contributor); Rogers, John H. (contributor) - 2006
world interest rate. The country will be on a sustainable path – meaning it is not
violating its budget constraint – and …, it
may borrow now and run a current account deficit. Second, if the world interest rate is low, the
country … the nominal gross interest rate for period t.
t
B is the home country’s nominal claims
on the foreign country at time …