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Unformatted text preview: for the dierences? 5. China is widely suspected of sterilizing its recent purchases of U.S. dollar assets. Explain how you would examine the validity of this claim (e.g., what data would you look at, and how would you use it to decide whether China sterizes its reserve inows). Why might China want to do this? Are there any costs associated with this policy? 6. Briey compare and contrast rst- and second-generation theories of speculative at-tacks. For example, how do their assumptions about government policy dier? How would you go about distinguishing these theories empirically? Which provides more support for IMF bailouts? 1...
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- Spring '08