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Managing exchange rate misalignment and current account imbalances

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  • Luca Dedola

Abstract

Concerns about real exchange rate misalignment, current account imbalances and excessive fluctuations in capital flows are a recurrent theme in international policy discussions and have prompted calls to redirect macroeconomic policy towards correcting exchange rate volatility or unsustainable current account positions. This article looks at recent research on the emergence of misalignment and imbalances due to financial market imperfections and examines the related policy implications. JEL Classification: F32

Suggested Citation

  • Luca Dedola, 2011. "Managing exchange rate misalignment and current account imbalances," Research Bulletin, European Central Bank, vol. 13, pages 2-7.
    • Handle: RePEc:ecb:ecbrbu:2011:0013:1
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    File URL: http://www.ecb.europa.eu/pub/pdf/other/researchbulletin13en.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    exchange rate misalignment; current account imbalances;

    JEL classification:

    • F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

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