 The Intertemporal Approach to the Balance of Payments, and the Real Exchange RateChapter 18 in International Finance and Open-Economy Macroeconomics, 2016, pp 457-495 from Springer Abstract: Abstract Forward-looking behaviour, namely current behaviour (for example current saving and investment decisions) determined by calculations based on expectations of future variables (for example future income, productivity growth, real interest rates, etc.) is one of the hallmarks of modern macroeconomics, and forms the basis of the new open-economy macroeconomics (NOEM), the “new” or modern view, that considers trade and financial flows as the outcome of intertemporally optimal saving-investment decisions by forward-looking agents. The new international macroeconomic theory, following the steps of the new closed-economy macroeconomics, has reached a high degree of sophistication where new models are built based on microfoundations, and the open-economy macroeconomic behaviour is obtained as the outcome of intertemporal optimization by a representative agent This chapter illustrates the foundations of the intertemporal approach to the balance of payments and to the real exchange rate. Keywords: Current Account; Real Exchange Rate; Real Interest Rate; Indifference Curve; Nominal Exchange Rate (search for similar items in EconPapers) There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it. Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:spr:sptchp:978-3-662-49862-0_18 Ordering information: This item can be ordered from DOI: 10.1007/978-3-662-49862-0_18 Access Statistics for this chapter More chapters in Springer Texts in Business and Economics from Springer |
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