TY - JOUR
T1 - The role of saving and investment in exchange rate determination under alternative monetary mechanisms
AU - Helpman, Elhanan
AU - Razin, Assaf
PY - 1984/5
Y1 - 1984/5
N2 - We argue that the demand for national currencies depends on existing payment arrangements for imports and exports. Therefore, exchange rate movements depend on these arrangement. As a result, the relationship between exchange rate movements and various macroeconomic aggregates - like saving and investment - depend on what we call the monetary mechanism. These points are explicitly demonstrated by studying two extreme monetary mechanisms, one in which all payments are done with the seller's currency and one in which all payments are done with the buyer's currency.
AB - We argue that the demand for national currencies depends on existing payment arrangements for imports and exports. Therefore, exchange rate movements depend on these arrangement. As a result, the relationship between exchange rate movements and various macroeconomic aggregates - like saving and investment - depend on what we call the monetary mechanism. These points are explicitly demonstrated by studying two extreme monetary mechanisms, one in which all payments are done with the seller's currency and one in which all payments are done with the buyer's currency.
UR - http://www.scopus.com/inward/record.url?scp=0002415176&partnerID=8YFLogxK
U2 - 10.1016/0304-3932(84)90035-7
DO - 10.1016/0304-3932(84)90035-7
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AN - SCOPUS:0002415176
SN - 0304-3932
VL - 13
SP - 307
EP - 325
JO - Journal of Monetary Economics
JF - Journal of Monetary Economics
IS - 3
ER -