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ASSET REVALUATION AND TRADE BALANCE UNDER LIABILITY DOLLARIZATION: THE CASE OF SOUTH KOREA

HUIRAN PAN
경제연구소 (Hanyang Economic Research Institute)|2013.09|Journal of Economic Development|제38권 제3호|pp. 1-32|DOI 10.35866/caujed.2013.38.3.001

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키워드

Asset RevaluationCurrent AccountIntertemporal ApproachFinancial Account
주제분류경제학

초록

For the US, recent research has found that exchange rate and asset price movements play an important role in foreign asset revaluation and international trade. This paper studies the impacts of exchange rate and asset price fluctuations on foreign asset revaluation and trade balance in South Korea. I find that asset revaluation in South Korea differs from that in the US because both Korea’s foreign assets and liabilities are denominated in foreign currencies and are subject to exchange rate changes. Furthermore, as implied in recent work, external imbalance can help forecast exchange rates and portfolio returns, but now most of the forecasting power arises from trade imbalance, rather than asset imbalance.

Abstract

For the US, recent research has found that exchange rate and asset price movements play an important role in foreign asset revaluation and international trade. This paper studies the impacts of exchange rate and asset price fluctuations on foreign asset revaluation and trade balance in South Korea. I find that asset revaluation in South Korea differs from that in the US because both Korea’s foreign assets and liabilities are denominated in foreign currencies and are subject to exchange rate changes. Furthermore, as implied in recent work, external imbalance can help forecast exchange rates and portfolio returns, but now most of the forecasting power arises from trade imbalance, rather than asset imbalance.

참고문헌 (39)

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관련 논문AI추천

Is the valuation effect always beneficial for adjusting external imbalances?이한규한국계량경제학회 · 계량경제학보2022 · 제33권 제4호International Macroeconomic Fluctuations in Korea김소영경제연구소 · Seoul Journal of Economics2011 · 제24권 제1호EXCHANGE-RATE VOLATILITY AND INDUSTRY TRADE BETWEEN THE U.S. AND KOREAHanafiah Harvey, Mohsen Bahmani-Oskooee, Scott W. Hegerty경제연구소 · Journal of Economic Development2012 · 제37권 제1호Asset Price, the Exchange Rate, and Trade Balances in China: A Sign Restriction VAR Approach김원기대외경제정책연구원 · East Asian Economic Review2018 · 제22권 제3호Global imbalance, rebalancing and implications for Korea이준엽, 현정택, 홍진영정석물류통상연구원 · Journal of International Logistics and Trade2009 · 제7권 제2호The Role of Exchange Rates in Korea’s Commodity Trade with China조갑제대외경제정책연구원 · East Asian Economic Review2010 · 제14권 제2호

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