Are valuation effects desirable from a global perspective?
By: Pierpaolo Benigno
Contributors: National Bureau of Economic Research
Series: NBER working paper series -- working paper 12219; Working paper series (National Bureau of Economic Research : Online) -- working paper no. 12219.
Publisher: National Bureau of Economic Research
Published: 2006
Place of publication: Cambridge, MA
Language: eng
Format: [electronic resource] /
Description: "Recent studies have emphasized the role of valuation effects exchange rate and price 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" National Bureau of Economic Research web site.
Notes: Title from PDF file as viewed on 5/24/2006.

Includes bibliographical references.

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