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the world earning a positive net investment income. To rationalize this phenomenon, I propose a different theory about the … dollar exchange rate. In the model, world financial intermediaries demand US safe assets for their convenience value, but US … intermediaries do not demand foreign safe assets. Under an aggregate symmetric financial shock, the rest of the world buys more safe …
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This book deals with the economic consequences of monetary integration, which has long been dominated by the Optimal Currency Area (OCA) paradigm. In this model, money is perceived as having developed from a private sector cost minimization process to facilitate transactions. Not surprisingly,...
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