Liquidity traps, capital flows

• 成果类型: Article
• 署名作者: Acharya, Sushant; Bengui, Julien
• 署名单位: Federal Reserve System - USA; Federal Reserve Bank - New York; Universite de Montreal; Universite de Montreal
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2018.06.005
• 发表日期: 2018
• 页码: 276-298
• 关键词: capital flows; International spillovers; liquidity traps; Capital flow management; policy coordination; optimal monetary policy

摘要

Motivated by debates surrounding international capital flows during the Great Recession, we conduct a positive and normative analysis of capital flows when a region of the global economy experiences a liquidity trap. Capital flows reduce inefficient output fluctuations in this region by inducing exchange rate movements that reallocate expenditure towards the goods it produces. Restricting capital mobility hampers such an adjustment. From a global perspective, constrained efficiency entails subsidizing capital flows to address an aggregate demand externality associated with exchange rate movements. Absent cooperation, however, dynamic terms-of-trade manipulation motives drive countries to inefficiently restrict capital flows, impeding aggregate demand stabilization. (C)2018 Elsevier B.V. All rights reserved.