SP26 ECON 302 002 Homework #14 (International Finance)

Let 𝑎 ¯ 𝑛 𝑥 = − 0.02  (i.e., the U.S. is running a trade deficit in the long run) and 𝑅 ¯ 𝑤 = 𝑟 ¯ . Using the values for 𝑎 ¯ , 𝑏 ¯ 𝑖 , 𝑏 ¯ 𝑛 𝑥 , and 𝑅 𝑡 ′  from the previous questi...