This paper examines the relationship between financial regulation and the current account in an intertemporal model of … the current account where financial regulation affects the current account through liquidity constraints. Greater … liquidity constraints decrease the size and persistence of the current account response to a net output shock. The theory is …

This paper examines the relationship between financial regulation and the current account in an intertemporal model of … the current account where financial regulation affects the current account through liquidity constraints. Greater … liquidity constraints decrease the size and persistence of the current account response to a net output shock. The theory is …

regulation is overly reactive to past crises. This article addresses a less obvious but arguably more fundamental flaw: that … financial regulation is normally tethered to the financial architecture, including the distinctive design and structure of … financial firms and markets, in place when the regulation is promulgated. In order to effectively address future crises, this …