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| Alberto Behar and Ramin Hassan |
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| ''The responsiveness of the income balance to the exchange rate'' |
| ( 2025, Vol. 45 No.1 ) |
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| We estimate income balance semi-elasticities with respect to the exchange rate for a wide sample of countries and for different types of income. Semi-elasticities are small for most countries. Therefore, the income balance is generally not a significant channel through which the exchange rate stabilizes the current account and most exchange rate misalignment estimates can focus on trade. However, our method allows for country variation and indicates a significant minority of exceptions. |
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| Keywords: Income balance, Exchange rate elasticity, Exchange Rate assessment |
JEL: F4 - Macroeconomic Aspects of International Trade and Finance: General
F3 - International Finance: General |
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| Manuscript Received : Apr 26 2025 | | Manuscript Accepted : Mar 30 2025 |
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