Evidence is presented on the Real Interest Parity Hypothesis for a set of emerging and developed countries. This is done by carrying out a set of unit-root tests on the real interest differentials with respect to Germany and the US. Our results support the hypothesis of a rapid reversion towards...

The aim of this paper is to disentangle the effects of trade liberalisation during the mid-1980s from the liberalisation involved in the North American Free Trade Agreement (NAFTA) on exports, imports and the balance of payments in Mexico. The main empirical results suggest that the trade...

The objective of this research is to examine empirically the relationship between the current account balance and the real exchange rate for economies with different levels of development. We use data from the annual time series of the period 1980-2015 from the Development Indicators (2017) of...

We investigate and find evidence for the hysteresis hypothesis in UK imports from South Asian countries, using a monthly sample data that covers 1999 to 2012. This paper finds evidence of the asymmetric effect of exchange rate volatility that "large" depreciations significantly reduce UK imports...

We study the relationship between the government budget balance and the current account balance for Portugal, using quarterly data from 1999 to 2019. On the one hand, the causality tests find a unidirectional relation running from the current account balance to the government budget balance. On...

This paper applies the balance of payments constrained growth model to seventeen countries of Latin America over the period 1977-2002. The crucial parameter to estimate is the income elasticity of demand for imports which is done for Latin America as a whole, as well as for individual countries....

The intertemporal approach to the current account suggests modeling movements in the current account in a forward-looking, dynamic framework. In this framework, the current account reflects consumption smoothing of agents that lend and borrow from the rest of the world in the face of transitory...

In this paper, we empirically investigate whether multilateral adjustment to large U.S. external imbalances can help explain movements in the bilateral exchange rates of three commodity currencies---the Australian, Canadian and New Zealand (ACNZ) dollars. To examine the relationship between...

This paper studies the impact of international capital flows on asset prices through risk premia. We investigate whether foreign purchases of U.S. Treasury securities significantly contributed to the decline in excess returns on long-term bonds between 1995 and 2008. We run forecasting...

This article analyzes the exchange rate misalignment in Brazil in the period between 1994 and the early 2008, exploring its causes and consequences. The method used was to adjust the exchange rate according to the economic fundamentals. The estimations led to an expected long-term exchange rate,...