Capital movements, intersectoral resource shifts and the trade balance

Assaf Razin*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

21 Scopus citations


In this paper I consider the interactions between the internal structure of the economy and its external balance. In an intertemporal set-up with perfect foresight a simple pattern emerges current account deficits are associated with depreciating real exchange rates. The incorporation of real investments and government spendings change this pattern in a systematic way depending on factor intensities, the composition of government spending and its timing.

Original languageEnglish
Pages (from-to)135-152
Number of pages18
JournalEuropean Economic Review
Issue number1-2
StatePublished - 1984


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