NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Are Valuation Effects Desirable from a Global Perspective?

Pierpaolo Benigno

NBER Working Paper No. 12219
Issued in May 2006
NBER Program(s):   IFM   ME

Recent studies have emphasized the role of valuation effects due to exchange rate movements in easing the process of adjustment of the external balance of a country. This paper asks to what extent valuation effects are desirable from a global perspective as a mean to achieve an efficient allocation of resources. In a frictionless world, it is desirable to have large movements in prices and exchange rates. But once a small concern for price stability is introduced not only should prices be stabilized but also the response of the exchange rate should be muted. There is a minor role for valuation effects that depends both on the size and composition of assets and liabilities.

download in pdf format
   (363 K)

email paper

This paper is available as PDF (363 K) or via email.

This paper was revised on June 6, 2007

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12219

Published: Beigno, Pierpaolo. “Are Valuation Effects Desirable from a Global Perspective?” Journal of Development Economics 89 (2009): 170-180. citation courtesy of

Users who downloaded this paper also downloaded these:
Devereux and Sutherland w14794 Valuation Effects and the Dynamics of Net External Assets
Ghironi, Lee, and Rebucci w12937 The Valuation Channel of External Adjustment
Obstfeld and Rogoff w10869 The Unsustainable US Current Account Position Revisited
Blanchard, Giavazzi, and Sa w11137 The U.S. Current Account and the Dollar
Goetz, Laeven, and Levine w17660 The Valuation Effects of Geographic Diversification: Evidence from U.S. Banks
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us