With a figure that shows simultaneous equilibrium in the domestic money market and the foreign exchange market (uncovered interest parity), discuss how a balance of payments crises comes about.
How can a balance of payment crises make a bank run or deficit crisis more likely?
You have to come up with a figure that shows simultaneous equilibrium in the domestic money market and the foreign exchange market (uncovered interest parity), discuss how a balance of payments crises comes about.
How can a balance of payment crises make a bank run or deficit crisis more likely?