The Role of Private Financial Wealth in a Portfolio Model

A Study of the Effects of Fiscal Deficits on the Real Exchange Rate

  • Angel Calderón-Madrid

About this book


This book considers the implications for the dynamics of the exchange rate and private financial wealth. In a model in which fiscal imbalances are allowed to change the level of domestic public indebtedness. The analysis raises the possibility of an initial appreciation followed by a depreciation and a final exchange rate appreciation. It also highlights the importance that adjustments in the stock of privately-held financial assets have for the determination and speed of medium-run effects of shocks to the economy.


dynamics economy equilibrium exchange rates fiscal policy Portfolio Portfolio Model

Authors and affiliations

  • Angel Calderón-Madrid
    • 1
  1. 1.El Colegio de MexicoMexico CityMexico

Bibliographic information

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Finance, Business & Banking