The relationship between asset prices and fundamentals is characterized by both disconnect and predictability: asset prices are largely disconnected from current publicly observed fundamentals and at the same time contain information about future fundamentals, even when conditioning on current...

Global imbalances pose a serious question for academia and policy makers related to its formation, sustainability and correction. In this paper we analyze the required adjustments of exchange rates for rebalancing in current accounts. We set up a two-country two-sector model for the US-China...

Gross stocks of foreign assets have increased rapidly relative to national outputs since 1990, and the short-run capital gains and losses on those assets can amount to significant fractions of GDP. These fluctuations in asset values render the national income and product account measure of the...

This paper presents an eclectic model that systematizes the dynamics of self-fulfilling crises, using the main aspects of the three typologies of third generation models, to describe the stylized facts that hasten the withdrawal of a pegged exchange rate system. The most striking contributions...

This study examines the effects of capital account restrictions on capital flows in nine Asian economies over the period 1995–2005 using panel regressions with fixed effects. The results show that capital controls significantly affect capital flows when such flows are disaggregated by asset...

We analyze the global imbalances and the required adjustments for rebalancing in current accounts and real exchange rates. We set up a two-country two-sector model for the US-China with two asymmetries. First, we assume that the size of China initially is one third of the US but its size becomes...

We study international business cycles and capital flows in the UK, the United States and the Emerging Periphery in the period 1885-1939. Based on the same set of parameters, our model explains current account dynamics under both the Classical Gold Standard and during the Interwar period. We...

We analyze the global imbalances and the required adjustments for rebalancing in current accounts and real exchange rates. We set up a two-country two-sector model for the US- China with two asymmetries. First, we assume that the size of China initially is one third of the US but its size...

This paper examines the effectiveness of capital account policies in Thailand during the period 1993–2010. Our results show that policies toward capital account liberalization tend to be more effective than those toward capital account restriction in changing the volume of capital flows. The...

A stable net external position requires that the trade balance responds negatively to changes in the net external position. If financial integration makes financing external imbalances less costly, we expect slower external adjustment in more integrated economies. The study estimates...