Debt deleveraging and the exchange rate

• 成果类型: Article
• 署名作者: Benigno, Pierpaolo; Romei, Federica
• 署名单位: Luiss Guido Carli University
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2014.03.001
• 发表日期: 2014
• 页码: 1-16
• 关键词: Current account adjustment; liquidity trap; Debt deleveraging; Exchange rate

摘要

Deleveraging from high debt can provoke deep recession with significant international side effects. Swings in the nominal exchange rate and large variations in consumption, output, and terms of trade can happen during the adjustment. All these movements are inefficient and interesting trade-offs emerge from the perspective of global welfare. The optimal adjustment to global imbalances should not necessarily require large movements in the nominal exchange rate. A global liquidity trap can be desirable when countries are more open to trade. (C) 2014 Elsevier B.V. All rights reserved.