The paper develops a two-country preferred-habitat model in which currency and bond markets are populated by different investor clienteles — currency traders with price-elastic demand for foreign …
PublishedClassicReview of Economic StudiesOnline 22 Jan 2013Published Oct 2013
The textbook neoclassical growth model says countries whose productivity is catching up should invest more and import more capital. Across 68 developing countries over 1980-2000 the cross-country …
Because most trade is invoiced in a few dominant currencies rather than in the producer's or the destination's currency, it is the dollar exchange rate and not the bilateral one that drives import …