Exchange Rates and Global Rebalancing

Barry Eichengreen and Gisela Rua

Macroeconomics Working Papers from East Asian Bureau of Economic Research

Abstract: This paper considers the general equilibrium relationship between exchange rates and global imbalances. It emphasizes that the exchange rate is not a primitive but an equilibrium price determined by the policy mix. It uses extensions of the two-country Obstfeld-Rogoff model to analyze the response of imbalances and real exchange rates to shocks. Finally, it analyzes the characteristics of episodes in which chronic current account surpluses (as opposed to deficits) come to an end.

Keywords: exchange rates; Global rebalancing; Obstfeld-Rogoff model; chronic current account surpluses (search for similar items in EconPapers)
JEL-codes: F0 F3 F4 (search for similar items in EconPapers)
Date: 2011-04
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Exchange Rates and Global Rebalancing (2011)
Working Paper: Exchange Rates and Global Rebalancing (2011)
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