Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls

Andrew Hughes Hallett and Juan Carlos Martinez Oliva
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Juan Carlos Martinez Oliva: Asian Development Bank Institute

No 330, ADBI Working Papers from Asian Development Bank Institute

Abstract: This paper addresses the issue of international payments in a stock-flow framework, by capturing the interaction between the current account balance and international assets portfolios of domestic and foreign investors. It is argued that the stability of such interaction may be affected by shifts in the preferences of investors, by the relative rate of return of different assets, and—more in general—by institutional settings. The model is then used for policy analysis purposes to derive the conditions for the existence of dynamic equilibria, and if they can be attained, under the assumption of market-distorting policy choices.

Keywords: global economic imbalances; international payments; exchange rates; capital controls; current account balance; international assets portfolios (search for similar items in EconPapers)
JEL-codes: F13 F32 F34 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2011-12-08
New Economics Papers: this item is included in nep-cba and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls (2012)
Working Paper: Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls (2011)
Working Paper: Global Imbalances in a World of Inflexible Real Exchange Rates and Capital Controls (2011)
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