Implications for the Adjustment Process of International Asset Risks: Exchange Controls, Intervention and Policy Risk, and Sovereign Risk

Willem Buiter

No 516, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper analyzes the implications of international asset risks for the operation of the international adjustment process, with special emphasis on the scope for monetary policy. After a brief review of actual practice in the evaluation of country risk, the paper discusses a number of modifications in the standard theory of efficient international financial markets that are necessitated by the existence of country risk., For macroeconomic policy, the major implications are that domestic and foreign assets become imperfect substitutes and that world demand for domestic assets is likely to be less than perfectly elastic, even in the "small country" case, Even under a fixed exchange rate, a measure of domestic control over domestic interest rates therefore exists.

Date: 1980-07
Note: ITI IFM
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Published as Buiter, W.H. "Implications for the Adjustment Process of International Asset Risk: Exchange Controls, Intervention and Policy Risk, and Sovereign Risk ." Internationalization of Financial Markets & National Economic Policy, ed . by R.G. Hawkinsm R.M. Levich & C.G. Wihlberg, JAI Press, 1983, pp. 69-102
Published as Journal of Financial Economics, Vol. 13, no. 2 (1984): 187

Downloads: (external link)
http://www.nber.org/papers/w0516.pdf (application/pdf)

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: https://EconPapers.repec.org/RePEc:nbr:nberwo:0516

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w0516

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().