Question:
Give me Crises Krugman theory of Model Of Balance Of Payments.
Answer:
You want to know Crises Krugman theory of Model Of Balance Of Payments so here is which you are looking for:
1. A MACROECONOMIC MODEL
In order to study balance-of-payments crises we must have a model with two characteristics: (1) the demand for domestic currency depends on the exchange rate; (2) the exchange rate that clears the domestic money market changes over time. An elegant and tractable model with these characteristics was developed by Kouri [3], and I will use a slightly modified version of his model to provide the underpinnings for the discussion. The model involves many special assumptions, and no claims are made for its realism. But it should become ~ l e a r later that the main points of the analysis would go through in a variety of models.
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