Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
963170 | Journal of International Economics | 2011 | 11 Pages |
Abstract
⺠Whether valuation effects are stabilizing or not depends on the nature of underlying productivity shocks. ⺠In response to transitory shocks, valuation effects are stabilizing. ⺠In response to trend shocks, valuation effects amplify the impact of the current account on NFA position. ⺠The result is illustrated by the pattern of external imbalances between the U.S. and other G7 countries since the 1990s. ⺠Longer data on G7 countries also support the result.
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Authors
Ha Nguyen,