Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
968188 | Journal of Policy Modeling | 2007 | 18 Pages |
Abstract
This paper considers the impacts of discrete exchange rate changes in open economies with net foreign exchange liabilities and assets under the dollar standard. The author finds that the combination of wealth, price, investment, and indirect investment effects (when present) increases the complexity of predicting current account movements following exchange rate changes, which in many cases lead to ambiguous results. Because exchange rate changes can no longer be separated from domestic price-level and absorption effects, except in special cases, they cannot be used predictably, to adjust the trade balance.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Hong Qiao,