Deregulation and the current account
This paper studies how removing barriers to competition in the nontraded goods sector affects the current account, the real exchange rate, and factor prices in a small open economy. We show that the expansion of the nontraded sector that results from a deregulation shock is associated with an accumulation of foreign assets unless production of nontraded goods is very capital-intensive. Moreover, while the real exchange rate decreases monotonically towards its new steady state, the real wage may temporarily overshoot its long-run level.
|Date of creation:||2001|
|Date of revision:|
|Contact details of provider:|| Postal: D-78457 Konstanz|
Phone: +49 7531 88 2314
Web page: http://www.wiwi.uni-konstanz.de/
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Obstfeld, Maurice & Rogoff, Kenneth, 1995.
"Exchange Rate Dynamics Redux,"
Journal of Political Economy,
University of Chicago Press, vol. 103(3), pages 624-60, June.
- Obstfeld, Maurice & Rogoff, Kenneth, 1995. "Exchange Rate Dynamics Redux," CEPR Discussion Papers 1131, C.E.P.R. Discussion Papers.
- Maurice Obstfeld & Kenneth Rogoff, 1994. "Exchange Rate Dynamics Redux," NBER Working Papers 4693, National Bureau of Economic Research, Inc.
- Obstfeld, Maurice & Rogoff, Kenneth S., 1995. "Exchange Rate Dynamics Redux," Scholarly Articles 12491026, Harvard University Department of Economics.
- Maurice Obstfeld and Kenneth Rogoff., 1995. "Exchange Rate Dynamics Redux," Center for International and Development Economics Research (CIDER) Working Papers C95-048, University of California at Berkeley.
- Coto-Martinez, Javier & Dixon, Huw, 2003.
"Profits, markups and entry: fiscal policy in an open economy,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 27(4), pages 573-597, February.
- Javier Coto-Martínez & Huw D. Dixon, 2001. "Profits, Markups and Entry: Fiscal Policy in an Open Economy," CESifo Working Paper Series 550, CESifo Group Munich.
- Brock, Philip L & Turnovsky, Stephen J, 1994.
"The Dependent-Economy Model with Both Traded and Nontraded Capital Goods,"
Review of International Economics,
Wiley Blackwell, vol. 2(3), pages 306-25, October.
- Philip L. Brock & Stephen J. Turnovsky, 1993. "The Dependent Economy Model with Both Traded and Non-Traded Capital Goods," NBER Working Papers 4500, National Bureau of Economic Research, Inc.
- Christian Keuschnigg, 1996. "Overshooting adjustment to tariff liberalization," Open Economies Review, Springer, vol. 7(3), pages 237-255, July.
- Lane, Philip R., 1999.
"The New Open Economy Macroeconomics: a Survey,"
CEPR Discussion Papers
2115, C.E.P.R. Discussion Papers.
- Brock, Philip L., 1988. "Investment, the current account, and the relative price of non-traded goods in a small open economy," Journal of International Economics, Elsevier, vol. 24(3-4), pages 235-253, May.
- Sebastian Edwards, 1987.
"Tariffs, Terms or Trade, and The Real Exchange Rate in and Intertemporal Optimizing Model of the Current Account,"
UCLA Economics Working Papers
429, UCLA Department of Economics.
- Sebastian Edwards, 1987. "Tariffs, Terms of Trade, and the Real Exchange Rate in an Intertemporal Optimizing Model of the Current Account," NBER Working Papers 2175, National Bureau of Economic Research, Inc.
- Philip L. Brock, 1996. "International Transfers, the Relative Price on Non-Traded Goods, and the Current Account," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 163-80, February.
- Partha Sen & Stephen J. Turnovsky, 1988.
"Tariffs, Capital Accumulation, and the Current Account in a Small Open Economy,"
NBER Working Papers
2781, National Bureau of Economic Research, Inc.
- Sen, Partha & Turnovsky, Stephen J, 1989. "Tariffs, Capital Accumulation, and the Current Account in a Small Open Economy," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 30(4), pages 811-31, November.
- Gavin, Michael, 1991. "Tariffs and the current account : On the macroeconomics of commercial policy," Journal of Economic Dynamics and Control, Elsevier, vol. 15(1), pages 27-52.
- Stephen J. Turnovsky, 1997. "International Macroeconomic Dynamics," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262201119, June.
When requesting a correction, please mention this item's handle: RePEc:zbw:kondp1:315. 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: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.