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Intertemporal Price Speculation and the Optimal Current-Account Deficit: Reply and Clarification

Maurice Obstfeld

No 233425, Center for International and Development Economics Research (CIDER) Working Papers from University of California-Berkeley, Department of Economics

Abstract: In the model of Obstfeld (1983), a country hurt by a temporary shift in its terms of trade, whether the shift is infinitesimal or not, always runs a temporary current-account deficit. Temporary rises in relative export prices always cause surpluses in the model. This note derives these results within an analysis that clarifies how temporary terms-of-trade shocks affect the consumption-based real interest rate on external debt and, hence, the current account.

Keywords: Financial; Economics (search for similar items in EconPapers)
Pages: 19
Date: 1996-02
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Citations: View citations in EconPapers (8)

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Journal Article: Intertemporal price speculation and the optimal current-account deficit: reply and clarification (1996) Downloads
Working Paper: Intertemporal Price Speculation and the Optimal Current-Account Deficit: Reply and Clarification (1996) Downloads
Working Paper: Intertemporal Price Speculation and the Optimal Current-Account Deficit: Reply and Clarification (1996)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:ucbewp:233425

DOI: 10.22004/ag.econ.233425

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