Exchange Rates and Global Rebalancing
AbstractThis paper considers the general equilibrium relationship between exchange rates and global imbalances. It emphasizes that the exchange rate is not a primitive but an equilibrium price determined by the policy mix. It uses extensions of the two-country Obstfeld-Rogoff model to analyze the response of imbalances and real exchange rates to shocks. Finally, it analyzes the characteristics of episodes in which chronic current account surpluses (as opposed to deficits) come to an end.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Finance Working Papers with number 23258.
Date of creation: Apr 2011
Date of revision:
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exchange rates; Global rebalancing; Obstfeld-Rogoff model; chronic current account surpluses;
Other versions of this item:
- F0 - International Economics - - General
- F3 - International Economics - - International Finance
- F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
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- Leo de Haan & Hubert Schokker & Anastassia Tcherneva, 2008.
"What Do Current Account Reversals in OECD Countries Tell Us About the US Case?,"
The World Economy,
Wiley Blackwell, vol. 31(2), pages 286-311, 02.
- Leo de Haan & Hubert Schokker & Anastassia Tcherneva, 2006. "What do current account reversals in OECD countries tell us about the US case?," DNB Working Papers 111, Netherlands Central Bank, Research Department.
- Laurenceson, J. & Qin, F., 2005. "China's Exchange Rate Policy: The Case Against Abandoning the Dollar PEG," Discussion Paper 2005-70, Tilburg University, Center for Economic Research.
- Levy, Philip, 2011.
"The United States and the PRC: Macroeconomic Imbalances and Economic Diplomacy,"
ADBI Working Papers
328, Asian Development Bank Institute.
- Philip Levy, 2011. "The United States and the PRC : Macroeconomic Imbalances and Economic Diplomacy," Macroeconomics Working Papers 23208, East Asian Bureau of Economic Research.
- Philip Levy, 2011. "The United States and the PRC : Macroeconomic Imbalances and Economic Diplomacy," Governance Working Papers 23208, East Asian Bureau of Economic Research.
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