We study the relation among exchange rates, balance sheets, and macroeconomic outcomes in a small open economy. Because liabilities are dollarized,' a real devaluation has detrimental effects on entreprenurial net worth, which in turn constrains investment due to financial frictions. But there...

This paper studies the links between current accounts and relative price levels, finding that current account changes are associated with sizable future relative price level effects. This is done in panel regressions of the Penn effect, adding a lagged current account/GDP and other explanatory...

XI Inhaltsverzeichnis Vorwort VII I Einleitung ...