Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53701 
Year of Publication: 
2011
Series/Report no.: 
ADBI Working Paper No. 278
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
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.
JEL: 
F0
F3
F4
Document Type: 
Working Paper

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