Instability Caused by Exchange Rate Flexibility in FlexNIT Economies
In FlexNIT economies, where nations retain national control over monetary policy but do not commit to an inflation target, exchange rate flexibility often becomes a primary source of economic instability. This policy framework frequently leads to high and unstable inflation because the flexible exchange rate tends to amplify inflationary pressures rather than absorb economic shocks.
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Introduction to Macroeconomics Course
Ch.7 Macroeconomic policy in the global economy - The Economy 2.0 Macroeconomics @ CORE Econ
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Learn After
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