The use of the balance of payments as a shock absorber in fixed rate and managed float systems

Joshua Aizenman

doi:10.1016/0022-1996(81)90029-5

The use of the balance of payments as a shock absorber in fixed rate and managed float systems

Joshua Aizenman

Research output: Contribution to journal › Article › peer-review

6 Scopus citations

Abstract

This paper analyzes the use of the balance of payments as a shock absorber in fixed and managed exchange rate regimes. The analysis is conducted in a monetary intergenerational model. It shows that the balance of payments can be used to smooth consumption and raise the welfare of individuals. The paper also justifies the stabilization of consumption as a policy goal, achieved through the balance of payments mechanism.

Original language	English
Pages (from-to)	479-486
Number of pages	8
Journal	Journal of International Economics
Volume	11
Issue number	4
DOIs	https://doi.org/10.1016/0022-1996(81)90029-5
State	Published - 1 Jan 1981
Externally published	Yes

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/0022-1996(81)90029-5

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abstract = "This paper analyzes the use of the balance of payments as a shock absorber in fixed and managed exchange rate regimes. The analysis is conducted in a monetary intergenerational model. It shows that the balance of payments can be used to smooth consumption and raise the welfare of individuals. The paper also justifies the stabilization of consumption as a policy goal, achieved through the balance of payments mechanism.",

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AB - This paper analyzes the use of the balance of payments as a shock absorber in fixed and managed exchange rate regimes. The analysis is conducted in a monetary intergenerational model. It shows that the balance of payments can be used to smooth consumption and raise the welfare of individuals. The paper also justifies the stabilization of consumption as a policy goal, achieved through the balance of payments mechanism.

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The use of the balance of payments as a shock absorber in fixed rate and managed float systems

Abstract

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