Journal Article

International financial integration and the current account balance


Abstract: This Economic Letter first reviews some predictions about the exchange rate implications of a return of the U.S. current account into balance. It then presents a recent study that considers the role of greater financial integration and the resulting importance of valuation effects. Finally, it evaluates the impact of valuation effects for those countries that have purchased the bulk of liabilities issued by the U.S. in recent years.

Keywords: International trade; Balance of payments;

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Provider: Federal Reserve Bank of San Francisco

Part of Series: FRBSF Economic Letter

Publication Date: 2006

Order Number: 14