Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls
AbstractThis paper addresses the issue of international payments in a stock-flow framework, by capturing the interaction between the current account balance and international assets portfolios of domestic and foreign investors. It is argued that the stability of such interaction may be affected by shifts in the preferences of investors, by the relative rate of return of different assets, andâ€”more in generalâ€”by institutional settings. The model is then used for policy analysis purposes to derive the conditions for the existence of dynamic equilibria, and if they can be attained, under the assumption of market-distorting policy choices.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 23206.
Date of creation: Dec 2011
Date of revision:
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exchange rate; current account balance; Applied General Equilibrium model; capital controls; dynamic equilibria;
Other versions of this item:
- Andrew Hughes Hallett & Juan Carlos Martinez Oliva, 2012. "Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls," Global Economic Review, Taylor & Francis Journals, vol. 41(4), pages 319-340, December.
- Andrew Hughes Hallett & Juan Carlos Martinez Oliva, 2011. "Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls," Finance Working Papers 23206, East Asian Bureau of Economic Research.
- Hallett, Andrew Hughes & Oliva, Juan Carlos Martinez, 2011. "Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls," ADBI Working Papers 330, Asian Development Bank Institute.
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements
- F34 - International Economics - - International Finance - - - International Lending and Debt Problems
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- Atish R. Ghosh & Jun I. Kim & Enrique G. Mendoza & Jonathan D. Ostry & Mahvash S. Qureshi, 2013. "Fiscal Fatigue, Fiscal Space and Debt Sustainability in Advanced Economies," Economic Journal, Royal Economic Society, vol. 0, pages F4-F30, 02.
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