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External Wealth, the Trade Balance, and the Real Exchange Rate Author info | Abstract | Publisher info | Download info | Related research | Statistics Philip R. Lane
Gian Maria Milesi-Ferretti
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We examine the link between the net foreign asset position, the trade balance and the real exchange rate. In particular, we decompose the impact of a country's net foreign asset position ('external wealth') on its long-run real exchange rate into two mechanisms: the relation between wealth and the trade balance; and, holding fixed other determinants, a negative relation between the trade balance and the real exchange rate. We also provide additional evidence that the relative price of nontradables is an important channel linking the trade balance and the real exchange rate.
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Paper provided by Trinity College Dublin, Department of Economics in its series Trinity Economics Papers with number
200121.
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Date of creation: 2001Date of revision:
Handle: RePEc:tcd:tcduee:200121Contact details of provider: Postal: Trinity College, Dublin 2 Phone: (+ 353 1) 6081325 Fax: 6772503 Web page: http://www.tcd.ie/Economics/ More information through EDIRC
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Article Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2002.
"External wealth, the trade balance, and the real exchange rate ,"
European Economic Review ,
Elsevier, vol. 46(6), pages 1049-1071, June.
[Downloadable!] (restricted) Paper Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2002.
"External Wealth, the Trade Balance and the Real Exchange Rate ,"
CEPR Discussion Papers
3153, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted) Philip R. Lane & Gian Maria Milesi-Ferretti, 2001.
"External Wealth, the Trade Balance, and the Real Exchange Rate ,"
CEG Working Papers
200113, Trinity College Dublin, Department of Economics.
[Downloadable!] Lane, Philip R. & Gian Maria Milesi-Ferretti, 2002.
"External Wealth, the Trade Balance, and the Real Exchange Rate ,"
Royal Economic Society Annual Conference 2002
119, Royal Economic Society.
[Downloadable!] Gian Maria Milesi-Ferretti & Philip R. Lane, 2002.
"External Wealth, the Trade Balance, and the Real Exchange Rate ,"
IMF Working Papers
02/51, International Monetary Fund.
[Downloadable!] Ph.R. Lane & G.M. Milesi-Ferretti, 2003.
"External Wealth, the Trade Balance, and the Real Exchange Rate ,"
DNB Staff Reports (discontinued)
80, Netherlands Central Bank.
[Downloadable!] Find related papers by JEL classification: F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements F31 - International Economics - - International Finance - - - Foreign Exchange F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports :
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Lane, Philip R. & Milesi-Ferretti, Gian Maria, 2000.
"The Transfer Problem Revisited: Net Foreign Assets and Real Exchange Rates ,"
CEPR Discussion Papers
2511, C.E.P.R. Discussion Papers.
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"Structural Determinants of Real Exchange Rates and National Price Levels: Some Empirical Evidence ,"
American Economic Review ,
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Jose De Gregorio & Holger C. Wolf & Alberto Giovannini, 1994.
"International Evidence on Tradables and Nontradables Inflation ,"
IMF Working Papers
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NBER Working Papers
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CEG Working Papers
20018, Trinity College Dublin, Department of Economics.
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"Long-Term Capital Movements ,"
IMF Working Papers
01/107, International Monetary Fund.
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"Long-Term Capital Movements ,"
CEPR Discussion Papers
2873, C.E.P.R. Discussion Papers.
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"Long-Term Capital Movements ,"
NBER Working Papers
8366, National Bureau of Economic Research, Inc.
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"Long-Term Capital Movements ,"
Trinity Economics Papers
200112, Trinity College Dublin, Department of Economics.
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"Perspectives on OECD Economic Integration: Implications for US Current Account Adjustment ,"
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"Perspectives on OECD Economic Integration: Implications for US Current Account Adjustment ,"
Center for International and Development Economics Research, Working Paper Series
1006, Center for International and Development Economics Research, Institute for Business and Economic Research, UC Berkeley.
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Proceedings ,
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