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Current Account Dynamics and the Saving-Investment Nexus In a Changing and Uncertain World

Chinn, Menzie David; Itō, Hiro - National Bureau of Economic Research - 2024

We re-examine the determinants of current account balances (CAB) and the saving-investment nexus with focus on emerging market and developing economies (EMDEs). We are in a new age in terms of facing not just economic challenges but also other non-economic challenges such as global climate...

Persistent link: https://www.econbiz.de/10015145057

Excess Savings and Twin Deficits : The Transmission of Fiscal Stimulus in Open Economies

Aggarwal, Rishabh; Auclert, Adrien; Rognlie, Matthew; … - National Bureau of Economic Research - 2022

We study the effects of debt-financed fiscal transfers in a general equilibrium, heterogeneous-agent model of the world economy. In the long run, increases in government debt anywhere raise the world interest rate and increase private wealth everywhere. In the short run, a country with a...

Persistent link: https://www.econbiz.de/10013334403

Global Shocks, Institutional Development, and Trade Restrictions : What Can We Learn from Crises and Recoveries Between 1990 and 2022?

Aizenman, Joshua; Itō, Hiro; Park, Donghyun; Saadaoui, … - National Bureau of Economic Research - 2025

The Global Financial Crisis and the COVID-19 pandemic were two major shocks to the world economy in the 21st century. In this study, we analyze the patterns of recessions and recoveries of 101 advanced and developing economies. We identify the turning points of recessions and expansions between...

Persistent link: https://www.econbiz.de/10015409788

Canada's Pioneering Experience with a Flexible Exchange Rate in the 1950s : (Hard) Lessons Learned for Monetary Policy in a Small Open Economy

Bordo, Michael D. - 2007

This paper revisits Canada's pioneering experience with floating exchange rate over the period 1950-1962. It examines … whether the floating rate was the best option for Canada in the 1950s by developing and estimating a New Keynesian small open … that monetary policy was more volatile in the post-1957 period and Canada's macroeconomic performance suffered as a result …

Persistent link: https://www.econbiz.de/10012465041

Defaultable Debt, Interest Rates and the Current Account

Aguiar, Mark - 2004

World capital markets have experienced large scale sovereign defaults on a number of occasions, the most recent being Argentina's default in 2002. In this paper we develop a quantitative model of debt and default in a small open economy. We use this model to match four empirical regularities...

Persistent link: https://www.econbiz.de/10012467959

Liquidity Risk Aversion, Debt Maturity, and Current Account Surpluses : A Theory and Evidence from East Asia

Fukuda, Shin-ichi - 2007

The purpose of this paper is to show that macroeconomic impacts might be very different depending on what strategy developing countries will take. In the first part, we investigate what macroeconomic impacts an increased aversion to liquidity risk can have in a simple open economy model. When...

Persistent link: https://www.econbiz.de/10012465651

Tariffs, Capital Accumulation, and the Current Account in a Small Open Economy

Sen, Partha - 1988

This paper analyze these effects of a tariff in an intertemporal optimizing model, emphasizing the role of capital accumulation. Three types of increases in the tariff rate are considered: (i) unanticipated permanent; (ii) unanticipated temporary; (iii) anticipated permanent. There are two main...

Persistent link: https://www.econbiz.de/10012476276

A Portfolio Approach to Global Imbalances

Jiang, Zhengyang; Richmond, Robert J.; Zhang, Tony - National Bureau of Economic Research - 2022

We use a portfolio-based framework to understand what drives the decline of the U.S. net foreign asset (NFA) position and the reversal in returns earned on the US NFA (exorbitant privilege). We show that global savings gluts and monetary policies widened the U.S. NFA position, while investor...

Persistent link: https://www.econbiz.de/10013334470

Liquidity Traps, Prudential Policies, and International Spillovers

Bianchi, Javier; Coulibaly, Louphou - National Bureau of Economic Research - 2022

This paper studies the transmission channels of monetary and macroprudential policies in an open economy framework and evaluates the normative implications for international spillovers and global welfare. An analytical decomposition uncovers the prominent role of expenditure switching for...

Persistent link: https://www.econbiz.de/10013210066

Tariff Wars and Net Foreign Assets

Aguiar, Mark; Amador, Manuel; Fitzgerald, Doireann - National Bureau of Economic Research - 2025

This note addresses whether and when a trade war that imposes balanced trade (or even zero trade) can be consistent with initial non-zero net foreign asset positions. Using a bilateral trade model, we exploit insights from the classic literature on the Transfer Problem to characterize when gross...

Persistent link: https://www.econbiz.de/10015409774