Current account dynamics, real exchange rate adjustment, and the exchange rate regime in emerging-market economies

• 成果类型: Article
• 署名作者: Gervais, Olivier; Schembri, Lawrence; Suchanek, Lena
• 署名单位: Bank of Canada
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2015.10.003
• 发表日期: 2016
• 页码: 86-99
• 关键词: exchange rate regimes; Current account adjustment; Emerging market economies

摘要

In emerging-market economies, real exchange rate adjustment is critical for achieving a sustainable current account position and thereby for helping to maintain macroeconomic and financial stability. This study examines two related hypotheses: (i) that real exchange rate adjustment promotes the rebalancing of the current account and (ii) that a flexible nominal exchange rate facilitates real exchange rate adjustment and thus the rebalancing of the current account. Evidence from an event-study analysis for a large set of emerging-market economies over the period 1975-2008 indicates that real exchange rate adjustment has contributed significantly to reducing current account imbalances. The adjustment of current account deficits in countries with a fixed exchange rate regime typically occurs through an exchange rate crisis, and substantial costs in terms of forgone output are incurred. Vector-error-correction analysis supports the findings of the event study; namely, in the long run, real exchange rate movements facilitate current account adjustment. Crown Copyright (C) 2015 Published by Elsevier B.V. All rights reserved.