Are Valuation Effects Desirable from a Global Perspective?

Benigno, Pierpaolo

Are Valuation Effects Desirable from a Global Perspective?

No 12219, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Recent studies have emphasized the role of valuation effects due to exchange rate movements in easing the process of adjustment of the external balance of a country. This paper asks to what extent valuation effects are desirable from a global perspective as a mean to achieve an efficient allocation of resources. In a frictionless world, it is desirable to have large movements in prices and exchange rates. But once a small concern for price stability is introduced not only should prices be stabilized but also the response of the exchange rate should be muted. There is a minor role for valuation effects that depends both on the size and composition of assets and liabilities.

JEL-codes: F32 F41 F42 (search for similar items in EconPapers)
Date: 2006-05
New Economics Papers: this item is included in nep-fmk
Note: IFM ME
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (10)

Published as Beigno, Pierpaolo. “Are Valuation Effects Desirable from a Global Perspective?” Journal of Development Economics 89 (2009): 170-180.

Downloads: (external link)
http://www.nber.org/papers/w12219.pdf (application/pdf)

Related works:
Journal Article: Are valuation effects desirable from a global perspective? (2009)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:12219

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w12219

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().