Debt deleveraging and the exchange rate
| Autor: | Federica Romei, Pierpaolo Benigno |
|---|---|
| Rok vydání: | 2014 |
| Předmět: |
Consumption (economics)
Economics and Econometrics jel:E40 media_common.quotation_subject 1. No poverty jel:F32 ComputerApplications_COMPUTERSINOTHERSYSTEMS Global imbalances jel:E52 Current Account adjustment Monetary economics jel:F41 Terms of trade Recession Exchange rate Liquidity trap Debt 8. Economic growth Economics Deleveraging Finance media_common |
| Zdroj: | Journal of International Economics. 93:1-16 |
| ISSN: | 0022-1996 |
| DOI: | 10.1016/j.jinteco.2014.03.001 |
| Popis: | Deleveraging from high debt can provoke deep recession with significant international side effects. The exchange rate of the deleveraging country will depreciate in the short run and appreciate in the long run. The real interest rate will fall by more than in the rest of the world. Bounds and policies that constrain the adjustment can prolong and deepen the recession. Early exit strategies from accommodating monetary policy can be quite harmful, as can such other policies as keeping interest rates too high during the deleveraging period. The analysis also applies to a monetary union facing internal adjustment of current account imbalances. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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