Structural adjustment to a terms of trade disturbance

Gavin, Michael

doi:10.1016/0022-1996(90)90002-4

Cited by 60 publications

(25 citation statements)

References 15 publications

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“…To reduce the set of alternative theories consistent with the data, Ahmed explores formal econometric tests. A representative result from Ahmed (1986 which is estimated over 190880.56 This regression shows that the temporary component of government spending has a significant negative influence on the current account, whereas the permanent component itself does not, consistent with (46). Unfortunately, the regression's specification leaves open the possibility that G is the only significant determinant of the current account and that C1 plays no role at all-as an atemporal Keynesian model would predict.…”

Section: Early Testsmentioning

confidence: 86%

“…In the 1920s, Keynes and Ohlin disagreed on the price effects of German reparations; in the 1990s, observers 21Ostry (1988) and Edwards (1989) 8tudy interactions between the terms of trade and the relative price of nontradables. Gavin (1990) considers the terms of trade in a richer dynamic setting. For developing countries, it may be natural to assume that bonds are indexed to imports (e.g., 'dollars').…”

Section: The Terms Of Trade and The Transfer Problemmentioning

confidence: 99%

“…(9), according to which the current account depends on deviations of interest rates, output, government spending, and investment from 'permanent' levels. Indeed, most (but not, as we shill see, all) of these studies focus on the special case of (9) where constant real interest rate r = (1 -/3)/fl (46) Though less general than eq. (9), eq.…”

Section: Tests Of Intertemporal Current-account Modelsmentioning

confidence: 99%

“…4 Empirical evidence on the intertemporal approach 46 4.1 The relationship between national saving and domestic investment rates 47 4. The intertemporal approach views the current-account balance as the outcome of forward-looking dynamic saving and investment decisions.…”

mentioning

confidence: 99%

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The Intertemporal Approach to the Current Account

Obstfeld¹,

Rogoff²

1994

258

266

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The intertemporal approach views the current-account balance as the outcome of forwardlooking dynamic saving and investment decisions. This paper, a chapter in the forthcoming third volume of the Handbook of International Economics, surveys the theory and empirical work on the intertemporal approach as it has developed since the early 1980s. After reviewing the basic one-good, representative-consumer model, the paper considers a series of extended models incorporating relative prices, complex demographic structures, consumer durables, asset-market incompleteness, and asymmetric information. We also present a variety of empirical evidence illustrating the usefulness of the intertemporal approach, and argue that intertemporal models provide a consistent and coherent foundation for open-economy policy analysis. As such, the intertemporal approach should supplant the expanded versions of the Mundell-Fleming IS-LM model that currently furnish the dominant paradigm used by central banks, finance minisuies, and international economic agencies.

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Section: Early Testsmentioning

confidence: 86%

Section: The Terms Of Trade and The Transfer Problemmentioning

confidence: 99%

Section: Tests Of Intertemporal Current-account Modelsmentioning

confidence: 99%

mentioning

confidence: 99%

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The Intertemporal Approach to the Current Account

Obstfeld¹,

Rogoff²

1994

258

266

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“…We start by describing the country dynamics of aid over the conflict cycle. In Burundi and Ethiopia aid flows started at high levels during PeaceOnset but 14 TOT deterioration is empirically often associated with a depreciating RER although theoretically the relation between TOT and RER is ambiguous (Gavin, 1990). 15 Institutions for contract enforcement break down during civil war, pushing people to engage mostly in subsistence activities, avoiding transaction-intensive activities, including exports.…”

Section: Introductionmentioning

confidence: 99%

Post-Conflict Aid, Real Exchange Rate Adjustment, And Catch-Up Growth

Elbadawi¹,

Kaltani²,

Schmidt-Hebbel³

2007

Policy Research Working Papers

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Post-conflict countries receive substantial aid flows after the start of peace. While post-conflict countries' capacity to absorb aid (i.e., the quality of their policies and institutions) is built up only gradually after peace onset, the evidence suggests that aid tends to peak immediately after peace is attained and decline thereafter. Aid composition broadly reflects post-conflict priorities, with large parts of aid financing social expenditure and infrastructure investment. While moderate RER overvaluation is observed in post-conflicts, it cannot be traced down to the aid flows. The empirical evidence on world growth reveals new findings about the pattern of catchup growth during post-conflicts and the role of key growth determinants on post-conflict growth. Aid is an important determinant of growth, both generally and more strongly during post-conflict periods. Because RER misalignment reduces growth, RER overvaluation during post-conflicts reduces catch-up growth. Aid and RER overvaluation combined also lower growth. However, the negative growth effect of RER overvaluation declines with financial development.

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The effect of monetary policy on real exchange rate misalignment

Kazemi

Oğuş

2001

International Advances in Economic Research

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Structural adjustment to a terms of trade disturbance

Cited by 60 publications

References 15 publications

The Intertemporal Approach to the Current Account

The Intertemporal Approach to the Current Account

Post-Conflict Aid, Real Exchange Rate Adjustment, And Catch-Up Growth

The effect of monetary policy on real exchange rate misalignment

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