Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/227885
Authors: 
Razmi, Arslan
Year of Publication: 
2019
Series/Report no.: 
Working Paper No. 2019-19
Abstract: 
Real exchange rate policy can potentially be utilized to target the trade balance and/or development through capital accumulation. However, the presence of distributional conflict and the trade-off between current and future trade imbalances complicates matters. I show that policy assignment matters for dynamic stability. Moreover, the relative saving behavior of different functional income groups influences dynamic behavior. The analysis sheds light on why real exchange rate policy may often be unfeasible, even if desirable from a developmental perspective.
Subjects: 
Policy assignment
real exchange rates
investment subsidies
external balance
JEL: 
F43
F63
O16
E63
Document Type: 
Working Paper

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