Monetary models of exchange rates tend to focus on inflation differentials to explain exchange rate movements. This paper assesses the ability of currency flows to predict exchange rate changes. The focus is on Japan. Currency flows are assumed to depend on the level of the current account and...

When the current account balance and net capital outflows do not exactly offset each other, net payment flows arise. Payment inflows into a country push the real exchange rate up, outflows push it down. This paper uses a model of optimal consumption and portfolio choice to determine the factors...

During the past three decades, Japan's current account experienced five large swings. The yen appreciated considerably in periods when the current account boomed, and it depreciated whenever Japan's external performance weakened. However, there has always been a certain lag in the adjustment of...

During the past three decades, Japan s current account experienced five large swings. The yen appreciated considerably in periods when the current account boomed, and it depreciated whenever Japan s external performance weakened. However, there has always been a certain lag in the adjustment of...

During the past three decades, Japan's current account experienced five large swings. The yen appreciated considerably in periods when the current account boomed, and it depreciated whenever Japan's external performance weakened. However, there has always been a certain lag in the adjustment of...

Several countries in eastern Europe may accede to the European Union in about two years time, making them candidates to join Europe's single currency from 2006. Some well-known economists have advocated that countries in eastern Europe adopt the euro now either unilaterally or by prior...

During the past three decades, Japan’s current account experienced five large swings. The yen appreciated considerably in periods when the current account boomed, and it depreciated whenever Japan’s external performance weakened. However, there has always been a certain lag in the adjustment...

Several countries in eastern Europe may accede to the European Union in about two years time, making them candidates to join Europe¿s single currency from 2006. Some well-known economists have advocated that countries in eastern Europe adopt the euro now either unilaterally or by prior...