© 1995

The Role of Private Financial Wealth in a Portfolio Model

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


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

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  1. 1.El Colegio de MexicoMexico CityMexico

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