XXXXXXXXXXConsider the kind of inflation shocks described in question 1 and analyze how they would affect yields for inflation-proof (indexed) bonds. XXXXXXXXXX) “Ricardian equivalence implies that...

1. (18.4) Consider the kind of inflation shocks described in question 1 and analyze how they would affect yields for inflation-proof (indexed) bonds.

2. (18.6) “Ricardian equivalence implies that the supply and demand curves for government debt move by the same amount.” What does this statement mean? Is it likely to be true?




May 26, 2022
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