Secular Trend in the Real Exchange Rate
Modify the endowment economy of Section 8.2 by assuming that \(\beta<1/(1+r)\). Characterize the equilibrium dynamics. Provide intuition for the equilibrium behavior of the real exchange rate.
No solution has been posted yet. If you have a solution, we invite you to share it in the comment box at the bottom of this page.
---
title: "Exercise 8.2"
subtitle: "Secular Trend in the Real Exchange Rate"
---
<a class="return-button" href="index.qmd">⬅ Return</a>
## Problem
Modify the endowment economy of Section 8.2 by assuming that $\beta<1/(1+r)$. Characterize the equilibrium dynamics. Provide intuition for the equilibrium behavior of the real exchange rate.
## Answer
_No solution has been posted yet. If you have a solution, we invite you to share it in the comment box at the bottom of this page._