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Asset Prices Fell
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What does seem plain, however, is that the carry trade tends tobreak down when markets become more turbulent. In such conditions,those who borrowed yen to buy other assets (such as emerging-marketshares) might face a double blow as the yen rose while asset prices fell. If the turbulence were sufficiently large, many years' worth of profits from the carry trade might be wiped out. A steamroller could yet restore the reputation of economic theory.
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