Financial globalization has led to a large increase in international asset holdings. While the rise of associated dividend and interest flows has until now been muted by the decreasing trend in interest rates, this pattern could change, leading to a larger role of investment income flows in the...

This paper presents a two-country two-commodity dynamic model with free international asset trade in which one country achieves full employment and the other suffers long-run unemployment. Own and spill-over effects of changes in policy, technological and preference parameters that emerge...

This paper presents a two-country two-commodity dynamic model with free international asset trade in which one country achieves full employment and the other suffers long-run unemployment. Own and spill-over effects of changes in policy, technological and preference parameters that emerge...

Relatively little empirical evidence exists about countries' external adjustment to changes in fiscal policy and, in particular, to changes in taxes. This paper addresses this question by measuring the effects of tax and government spending shocks on the current account and the real exchange...

The goal of this paper is to address the role of the real effective exchange rate (fundamentals, misalignment and volatility) for the current account using a panel data analysis for a set of 58 countries, over the period of 1994-2014. The results suggest that exchange rate misalignment is...

This paper extends the model of Engler et al. (2007) on the adjustment of the US current account to a three-country world economy. This allows an analysis of the differential impact of a reversal of the US current account on Europe and Asia. In particular, the outcomes under different exchange...

This paper reviews three different concepts of equilibrium exchange rates that are widely used in policy analysis and constitute the backbone of the IMF CGER assessment: the Macroeconomic Balance, the External Sustainability and the reduced form approaches. We raise a number of econometric...

After the decline in oil prices, many oil exporters face the need to improve their externalbalances. Special characteristics of oil exporters make the exchange rate an ineffectiveinstrument for this purpose and give fiscal policy a sizeable role. These conclusions aresupported by regression...

The goal of this paper is to address the role of the real effective exchange rate (fundamentals, misalignment and volatility) for the current account using a panel data analysis for a set of 58 countries, over the period of 1994-2014. The results suggest that exchange rate misalignment is...

We investigate the possibility that the large current account deficits of the U.S. are the outcome of optimizing behavior. We develop a simple long-run world equilibrium model in which the current account is determined by the expected discounted present value of its future share of world GDP...