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Comprehensive Examinations-Iped-Monetary Policy II.B-Section 2a. The first generation models (1G) is concerned with the circumstances in which a balance of payment (BoP) problem (i.e. a country’s gradually loss of reserves) evolves into a BoP crisis in which speculators attack the currency. These crises are a natural outcome of maximizing behavior by investors. When the government’s willingness.