Microsoft Word - Tutorial 7 2016 questions.docx
Consider the 1961 revaluation in Germany and the 1997 devaluation in Thailand:
In 1961, Germany faced the dilemma of an external surplus and a booming economy. As a result, speculative capital flowed into Germany and the Germans felt obliged to revalue their currency.
- 1.Can you describe how Germany?s "revaluation crisis" or "inflow attack" might operate when the government (like Germany's at the time) is highly fearful of inflation?
- 2.Compare and contrast the German ?revaluation crisis? in 1961 and the Thai ?devaluation crisis? in 1997.
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