Global and European trade balances have seen strong divergences combined with strong movements in the exchange rate. Trade balances and real effective exchange rates are related. Using different measures of the real effective exchange rate, we show that this long-run link hinges on the relative...

This paper investigates the dynamic implications of Krugman’s (1999) model of financial crises with balance-sheet effects, which has a considerable impact on the literature as well as the teaching of international financial crisis. By explicitly taking account of wealth accumulation and...

This paper uses a Bayesian approach to estimate a standard international real business cycle model augmented with preferences with zero wealth-effect, variable capacity utilization and investment adjustment costs. First, I find that the bulk of fluctuations in country-specific outputs,...

The paper examines misalignment of the Turkish lira between 1998 to 2008. Misalignment, specifically overvaluation has been linked to fixed exchange rate regimes. By studying the case of Turkey during this period which covers both a fixed and floating exchange rate regime, we contribute to the...

Since the 1980s, most emerging economies have experienced economic crises associated with large, prolonged current account deficits and real exchange rate misalignment. Eventually these governments ended up devaluing national currencies. Empirical evidence from developing countries suggests that...

The Chinese government has come under increasing criticism from both the U.S. government and some critics in U.S. industry for manipulating its currency. This article offers some insight on whether the yuan is correctly valued. Evidence suggests that, regardless of whether a fixed exchange rate...

This paper investigates investment savings relationships in 26 OECD countries and how these relationships change when countries in the considered panel vary. Therefore panel estimations using annual data for the period 1970-2008 are made for different groups of developed countries, such as the...

The purpose of this paper is to investigate the level of capital mobility in European Union members using the Feldstein-Horioka puzzle proposed by Feldstein and Horioka (1980) in order to investigate relations between saving and investment flows. In this paper, data for 27 European countries...

The purpose of this paper is to investigate the level of capital mobility in the largest economies of Asia by testing the Feldstein-Horioka puzzle. Panel estimations using quarterly data for the period from 1995 to 2011 have been made for the seven largest economies of Asia, specifically Russia,...

This paper investigates the level of capital mobility in Russia, testing the Feldstein-Horioka puzzle proposed by Feldstein and Horioka (1980). The study examines relations between saving and investment flows in Russia in the presence of structural breaks. It employs the quarterly data for the...