Are valuation effects desirable from a global perspective?

• 成果类型: Article; Proceedings Paper
• 署名作者: Benigno, Pierpaolo
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2008.01.009
• 发表日期: 2009
• 页码: 170-180
• 关键词: International finance; current account; Exchange rate

摘要

Recent studies have emphasized the role of valuation effects due to exchange rate movements in easing the process of adjustment of the external balance of a country. This paper asks to what extent valuation effects are desirable from a global perspective as a mean to achieve an efficient allocation of resources. In a frictionless world, it is desirable to have large movements in prices and exchange rates. But once a small degree of price rigidity is introduced not only should prices be stabilized but also the response of the exchange rate should be muted. There is a minor role for valuation effects that depends both on the size and composition of assets and liabilities. (C) 2008 Elsevier B.V. All rights reserved.