A Financial Analysis of the Economic Effects of Having to Reverse Current Account Deficits

PRACTICAL FINANCIAL ECONOMICS, Praeger, 2003

48 Pages Posted: 15 Mar 2000 Last revised: 10 Nov 2008

See all articles by Austin Murphy

Austin Murphy

Oakland University - School of Business Administration

Multiple version iconThere are 2 versions of this paper

Date Written: 2003

Abstract

This research develops a theoretical model of current account deficits that explains the effects of having to reverse such imbalances. The theory defines precise mathematical relationships which should exist between the balance of payments, exchange rates, interest rates, inflation, income, and investor expectations. The model is consistent with both currency crises and less volatile situations.

JEL Classification: F32

Suggested Citation

Murphy, J. Austin, A Financial Analysis of the Economic Effects of Having to Reverse Current Account Deficits (2003). PRACTICAL FINANCIAL ECONOMICS, Praeger, 2003, Available at SSRN: https://ssrn.com/abstract=215629 or http://dx.doi.org/10.2139/ssrn.215629

J. Austin Murphy (Contact Author)

Oakland University - School of Business Administration ( email )

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