Volume 2 delves deep into how changes in domestic credit affect foreign reserves. You will learn how to derive the reserve flow equation and why "excessive credit creation" leads directly to a loss of reserves.
Using interest rates to control runaway inflation.
, building on the foundational accounting and sectoral analysis introduced in Volume 1. International Monetary Fund | IMF Core Focus of Volume 2
The goal of FP is to correct disequilibrium (e.g., high inflation, balance of payments deficits) by projecting a consistent set of economic targets. traditionally introduces the accounting identities and basic linkages. Volume 2 , however, is where the technical rigor intensifies.
: Diagnose imbalances (e.g., high inflation, unsustainable debt).