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The Relation Between the Current Account and the Exchange Rate: a Survey of the Recent Literature

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Exchange Rates in Multicountry Econometric Models

Abstract

The subject of this paper is the recent literature on the relationship between changes in a country’s exchange rate and changes in its current account balance. Given the nature of the workshop and my belief in the advantages of specialization, I have limited the survey to the literature dealing with theoretical aspects and direct empirical tests of the relationship. Thus I have not covered the literature on macroeconomic modelling, and there are only brief references to recent work in such areas as the estimation of import/export demand elasticities. My approach has been to ask ‘What do “consumers” of research in this area find when they go to the literature?’.

The opinions and conclusions expressed in this paper are my own and do not necessarily reflect the views of the GATT secretariat. I would like to thank members of the Research Seminar in International Economics at the IUHEI, as well as the participants in the Workshop at the University of Leuven, for comments on earlier drafts.

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Authors
  1. Richard Blackhurst
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  2. Marie-Christine Adam
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Editor information

Editors and Affiliations

  1. Catholic University of Leuven, Belgium

    Paul De Grauwe (Professor of Economics) & Theo Peeters (Professor of Economics) (Professor of Economics) &  (Professor of Economics)

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© 1983 Paul De Grauwe and Theo Peeters

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Blackhurst, R., Adam, MC. (1983). The Relation Between the Current Account and the Exchange Rate: a Survey of the Recent Literature. In: De Grauwe, P., Peeters, T. (eds) Exchange Rates in Multicountry Econometric Models. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-17286-3_3

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