Advanced Search
MyIDEAS: Login

Trade and Exchange-Rate Dynamics in a Dynamic Competitive Economy

Contents:

Author Info

  • David K. Backus
  • Patrick J. Kehoe

Abstract

We apply recent advances in dynamic competitive analysis to open economy macroeconomics and draw out implications for comovement among consumption, output, trade balances, government deficits, and exchange rates. The real economy is a stochastic exchange model with complete markets. With time-separable preferences, cross-country risk-sharing implies perfect correlation between consumption in different countries, even when preference and endowments differ. With mild restrictions on the endowment process, this also implies a positive correlation between net exports and output in every country. With introduce money using a cash-in-advance constraint and show that any correlation between exchange rates and the balance of payments can be made consistent with the theory.

Download Info

To our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.

Bibliographic Info

Paper provided by Queen's University, Department of Economics in its series Working Papers with number 684.

as in new window
Length: 40 pages
Date of creation: 1987
Date of revision:
Handle: RePEc:qed:wpaper:684

Contact details of provider:
Postal: Kingston, Ontario, K7L 3N6
Phone: (613) 533-2250
Fax: (613) 533-6668
Email:
Web page: http://qed.econ.queensu.ca/
More information through EDIRC

Related research

Keywords:

References

No references listed on IDEAS
You can help add them by filling out this form.

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. David K. Backus & Patrick J. Kehoe, 1988. "On the denomination of government debt: a critique of the portfolio balance approach," Staff Report 116, Federal Reserve Bank of Minneapolis.

Lists

This item is featured on the following reading lists or Wikipedia pages:
  1. Canadian Macro Study Group

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:qed:wpaper:684. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mark Babcock).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.