search query: @author Antinolfi, G. / total: 2
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Author: | Antinolfi, G. Huybens, E. |
Title: | Capital accumulation and real exchange rate behavior in a small open economy with credit market frictions |
Journal: | Economic Theory
1998 : VOL. 12:3, p. 461-488 |
Index terms: | MARKETS ECONOMIC THEORY EXCHANGE RATES |
Language: | eng |
Abstract: | The authors consider the nature of the relationship between the real exchange rate and capital formation. They present a model of a small open economy that produces and consumes two goods, one tradeable and one not. Domestic residents can borrow and lend abroad, and costly state verification (CSV) is a source of frictions in domestic credit markets. The real exchange rate matters for capital for capital accumulation because it affects the potential for investors to provide internal finance, which mitigates the CSV problem. |
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