Exchange Rates and Global Rebalancing

Barry Eichengreen and Gisela Rua

No 278, ADBI Working Papers from Asian Development Bank Institute

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: global imbalances; exchange rates; current account; economic rebalancing; global rebalancing (search for similar items in EconPapers)
JEL-codes: F00 F30 F40 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2011-04-13
New Economics Papers: this item is included in nep-cba, nep-dge, nep-ifn and nep-opm
References: View references in EconPapers View complete reference list from CitEc
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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