Current account dynamics and the terms of trade : Harberger-Laursen-Metzler two generations later

This is a study of the current account dynamics resulting from the savings and investment dinamycs in a samll open economy that is subject to exogenous changes in its terms of trade and in world interest rates. Anticipated and unanticipated, as well as temporary and permanent, terms-of-trade changes...

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Bibliographic Details
Main Authors: Persson, Torsten, Svensson, Lars E. O
Format: Book
Published: Chicago, Ill. University of Chicago Press February 1985
Series:Journal of Political Economy n. 1
Subjects:
Description
Summary:This is a study of the current account dynamics resulting from the savings and investment dinamycs in a samll open economy that is subject to exogenous changes in its terms of trade and in world interest rates. Anticipated and unanticipated, as well as temporary and permanent, terms-of-trade changes have very different effects. There is, however, a general tendency toward cycles in both savings and investment, which gives rise to cycles in the current account. It is shown that the classic Harberger-Laursen-Metzler effect on savig of a terms-of-trade deterioration can have any sign for plausible parameter values, both for temporary and permanent disturbanses.
Physical Description:pp. 43-65 il.
Bibliography:Incluye bibliografía
ISSN:00223808