The responsiveness of the income balance to the exchange rate

Alberto Behar and Ramin Hassan ()
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Ramin Hassan: Cornerestone Research

Economics Bulletin, 2025, vol. 45, issue 1, 617 - 622

Abstract: We estimate income balance semi-elasticities with respect to the exchange rate for a wide sample of countries and for different types of income. Semi-elasticities are small for most countries. Therefore, the income balance is generally not a significant channel through which the exchange rate stabilizes the current account and most exchange rate misalignment estimates can focus on trade. However, our method allows for country variation and indicates a significant minority of exceptions.

Keywords: Income balance; Exchange rate elasticity; Exchange Rate assessment (search for similar items in EconPapers)
JEL-codes: F3 F4 (search for similar items in EconPapers)
Date: 2025-03-30
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