The Resource An equilibrium model of "global imbalances" and low interest rates, Ricardo J. Caballero, Emmanuel Farhi [and] Pierre-Olivier Gourinchas., (electronic resource)

An equilibrium model of "global imbalances" and low interest rates, Ricardo J. Caballero, Emmanuel Farhi [and] Pierre-Olivier Gourinchas., (electronic resource)

Label
An equilibrium model of "global imbalances" and low interest rates
Title
An equilibrium model of "global imbalances" and low interest rates
Statement of responsibility
Ricardo J. Caballero, Emmanuel Farhi [and] Pierre-Olivier Gourinchas.
Creator
Contributor
Provider
Subject
Language
eng
Summary
Three of the most important recent facts in global macroeconomics - the sustained rise in the US current account deficit, the stubborn decline in long run real rates, and the rise in the share of US assets in global portfolio - ear as anomalies from the perspective of conventional wisdom and models. Instead, in this paper we provide a model that rationalizes these facts as an equilibrium outcome of two observed forces: a) potential growth differentials among different regions of the world and, b) heterogeneity in these regions' capacity to generate financial assets from real investments. In extensions of the basic model, we also generate exchange rate and FDI excess returns which are broadly consistent with the recent trends in these variables. Unlike the conventional wisdom, in the absence of a large change in (a) or (b), our model does not augur any catastrophic event. More generally, the framework is flexible enough to shed light on a range of scenarios in a global equilibrium environment. Keywords: Current account deficits, capital flows, interest rates, global portfolios and equilibrium, growth and financial development asymmetries, exchange rates, FDI, intermediation rents. JEL Classifications: EO, F3, F4, G1
Member of
Additional physical form
Abstract in HTML and working paper for download in PDF available via World Wide Web at the Social Science Research Network.
Cataloging source
MYG
http://library.link/vocab/creatorName
Caballero, Ricardo J
Illustrations
illustrations
Index
no index present
Literary form
non fiction
Nature of contents
  • dictionaries
  • bibliography
  • technical reports
http://library.link/vocab/relatedWorkOrContributorName
  • Farhi, Emmanuel
  • Gourinchas, Pierre-Olivier
  • Massachusetts Institute of Technology
  • Internet Archive
Series statement
Working paper series / Massachusetts Institute of Technology, Dept. of Economics
Series volume
working paper 06-02
http://library.link/vocab/subjectName
  • Equilibrium (Economics)
  • Interest rates
Label
An equilibrium model of "global imbalances" and low interest rates, Ricardo J. Caballero, Emmanuel Farhi [and] Pierre-Olivier Gourinchas., (electronic resource)
Instantiates
Publication
Note
"January 14, 2006."
Bibliography note
Includes bibliographical references (p. 40-41)
Color
mixed
Dimensions
28 cm.
Dimensions
unknown
Extent
53 p.
Other physical details
ill.
Specific material designation
remote
System control number
  • (OCoLC)68044257
  • (CaSfIA)equilibriummodel00caba
  • (CaSfIA)001368410
Label
An equilibrium model of "global imbalances" and low interest rates, Ricardo J. Caballero, Emmanuel Farhi [and] Pierre-Olivier Gourinchas., (electronic resource)
Publication
Note
"January 14, 2006."
Bibliography note
Includes bibliographical references (p. 40-41)
Color
mixed
Dimensions
28 cm.
Dimensions
unknown
Extent
53 p.
Other physical details
ill.
Specific material designation
remote
System control number
  • (OCoLC)68044257
  • (CaSfIA)equilibriummodel00caba
  • (CaSfIA)001368410

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