Impact of U.S. Twin Deficits on Bilateral Exchange Rates: Canada and China

• 발행기관: People & Global Business Association
• 저자명: David Y Chen
• 간행물 정보: 『Global Business and Finance Review』Vol.16 No.1, 43~55쪽, 전체 13쪽
• 주제분류: 경제경영 > 경영학
• 파일형태: PDF
• 발행일자: 2011.06.30

영문 초록

This paper examines the U.S. twin deficits debate from a bilateral exchange rate with Canada and China and their respective international reserves angle. This one-lag dynamic linear model is based on the Euler equation expressed in a rational expectations component for aggregate consumption. Findings indicate that the variations in budget deficit had much less impact on the volatility in bilateral U.S.-China exchange rates than those for U.S.-Canada. The U.S. budget deficit variations tend to affect the variations in China's international reserves but not in Canada's. One reason is the near-fixed peg regime in the bilateral U.S.-China exchange rate during the study period of 1990 through 2008.

목차

Abstract

Ⅰ. Introduction

Ⅱ. Literature Review

Ⅲ. Model and Data

Ⅳ. Results

Ⅴ. Analysis

Ⅵ. Empirical Implication on Bilateral Exchange Rates

Ⅶ. Conclusion

References