Capital Account Policies and the Real Exchange Rate

No WP12-14, Working Paper Series from Peterson Institute for International Economics

Abstract: This paper presents a simple model of how a small open economy can undervalue its real exchange rate using its capital account policies. The paper presents several properties of such policies, and proposes a rule of thumb to assess their welfare cost. The model is applied to an analysis of Chinese capital account policies.

Keywords: capital flows; capital controls; real exchange rate; international reserves; sterilized foreign exchange reserve intervention; financial repression; mercantilism; China (search for similar items in EconPapers)
JEL-codes: F31 F32 F36 (search for similar items in EconPapers)
Date: 2012-09
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Citations: View citations in EconPapers (63)

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Related works:
Journal Article: Capital Account Policies and the Real Exchange Rate (2013)
Chapter: Capital Account Policies and the Real Exchange Rate (2012)
Working Paper: Capital Account Policies and the Real Exchange Rate (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:iie:wpaper:wp12-14

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