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general validity: (a) deficits lead to inflation and stopping inflation requires elimination of deficits; (b) a major effect … of inflation is a large shift of the tax burden from capital to labor; and (c) shocks to labor supply, such as massive …
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We propose a "debt view" to explain the dominant international role of the dollar and provide broad empirical support for it. Within a simple capital structure model in which firms optimally choose the currency composition of their debt, we derive conditions under which all firms issue debt in a...
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