Global current account imbalances and exchange rate adjustment: the role of oil suppliers

Christian Oberpriller

No 442, Kiel Advanced Studies Working Papers from Kiel Institute for the World Economy (IfW Kiel)

Abstract: The present paper extends the Obstfeld and Rogoff (2005) framework of current account imbalances by the oil exporting countries as a fourth region. It sets the stage for a variety of analysis that can be conducted within a four-region-setting that accounts for the importance of OPEC as a major current account surplus provider in the process of narrowing global current account imbalances. We find that including the oil exporting countries as an additional region consisting of OPEC and Russia lowers the adjustment effects predicted by Obstfeld and Rogoff. Depending on different assumptions on how global imbalances might be eliminated, our model predicts a real dollar depreciation in the range of 29.9 to 52.6 percent.

Keywords: current account; exchange rates; global imbalances (search for similar items in EconPapers)
JEL-codes: F31 F32 F41 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:ifwasw:442

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