External Wealth, the Trade Balance, and the Real Exchange Rate
Philip Lane and
Gian Maria Milesi-Ferretti ()
No 119, Royal Economic Society Annual Conference 2002 from Royal Economic Society
Abstract:
We examine the link between the net foreign asset position, the trade balance and the real exchange rate. In particular, we decompose the impact of a countryís net foreign asset position (ëexternal wealthí) on its long-run real exchange rate into two mechanisms: the relation between external wealth and the trade balance; and, holding fixed other determinants, a negative relation between the trade balance and the real exchange rate. We also provide additional evidence that the relative price of nontradables is an important channel linking the trade balance and the real exchange rate.
Date: 2002-08-29
New Economics Papers: this item is included in nep-ifn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (170)
Downloads: (external link)
http://repec.org/res2002/Lane.pdf full text
Related works:
Journal Article: External wealth, the trade balance, and the real exchange rate (2002) 
Working Paper: External Wealth, the Trade Balance and the Real Exchange Rate (2002) 
Working Paper: External Wealth, the Trade Balance, and the Real Exchange Rate (2002) 
Working Paper: External Wealth, the Trade Balance, and the Real Exchange Rate (2001) 
Working Paper: External Wealth, the Trade Balance, and the Real Exchange Rate (2001) 
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:ecj:ac2002:119
Access Statistics for this paper
More papers in Royal Economic Society Annual Conference 2002 from Royal Economic Society Contact information at EDIRC.
Bibliographic data for series maintained by Christopher F. Baum ().