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340 CHAPTER 11. BALANCE OF PAYMENTS CRISESRealignment rule. A realignment will be triggered if `R 0and2c d > λ[αδ e +ȳ + u] 2 . It will andrevalue if u λ[αδ e +ȳ + u] 2 . The rule can be writtenmore compactly asλ[αδ e +ȳ + u] 2 > 2c k , (11.36)where k = d if u>0andk = r if uū triggers adevaluation. Write (11.36) as an equality, set c k = c d , and solve forthe roots of the equation. You are looking for the positive devaluationtrigger point so ignore the negative root because it is irrelevant. Thepositive root issū = −αδ e 2cd− ȳ +λ . (11.37)Now do the same for negative realizations of u, and throw away thepositive root. The lower trigger point issu = −αδ e 2cd− ȳ −λ . (11.38)The points [u, ū] are those that trigger the escape option. Realizationsof u in the band [u, ū] result in maintenance of the Þxed exchange rate.Figure 11.2 shows the attack points for δ e =0.03 with ȳ =0.01, α =1,θ =0.15, c r = c d =0.0004.