Economics at your fingertips  

Foreign debt, distribution, inflation, and growth in an SFC model

Pablo Bortz

European Journal of Economics and Economic Policies: Intervention, 2014, vol. 11, issue 3, 269-299

Abstract: We present an open economy growth model, using Stock-Flow Consistent (SFC) methodology. Our contribution is to add the possibility of one country issuing debt denominated in another country's currency, as well as allowing its firms to borrow from foreign banks. We investigate the effects and interactions that these features have on trade and financial flows, income distribution, foreign debt, and fiscal and monetary policy. Our results point towards the dismissal of the ‘twin deficit’ view, and support an active management of the exchange rate, in light of contradictory effects of fixed and flexible exchange rate regimes, according to the circumstances.

Keywords: Stock-Flow Consistent models; exchange rate policy; income distribution; twin deficits; external debt (search for similar items in EconPapers)
JEL-codes: E12 E24 E31 E44 F32 F43 (search for similar items in EconPapers)
Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (6) Track citations by RSS feed

Downloads: (external link) (application/pdf)
Restricted access

Related works:
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:

Access Statistics for this article

European Journal of Economics and Economic Policies: Intervention is currently edited by Torsten Niechoj

More articles in European Journal of Economics and Economic Policies: Intervention from Edward Elgar Publishing
Bibliographic data for series maintained by Phillip Thompson ().

Page updated 2021-12-02
Handle: RePEc:elg:ejeepi:v:11:y:2014:i:3:p269-299