01822cas a2200253 a 4500 AALejournalIMF000193 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451934731 1018-5941 BD-DhAAL BD-DhAAL Helbling, Thomas. Real Interest Rates, Real Exchange Rates, and Net Foreign Assets in the Adjustment Process / Thomas Helbling, Bart Turtelboom. Washington, D.C. : International Monetary Fund, 1995. 1 online resource (38 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper analyzes the recent behavior of real exchange rates, the trade balance and the net foreign asset position of the United States in an intertemporal optimizing model of the world economy that incorporates heterogeneity across countries and imperfect international capital and good markets. While the model successfully tracks the dynamics of trade balances and net foreign assets it generates too much consumption smoothing and excessively volatile relative prices. Resolving these inadequacies simultaneously is difficult as the elasticity of substitution between tradables and nontradables affects in opposite ways the degree of consumption smoothing and the volatility of relative prices. Mode of access: Internet Turtelboom, Bart. IMF Working Papers; Working Paper ; No. 1995/129 Full text available on IMF http://elibrary.imf.org/view/journals/001/1995/129/001.1995.issue-129-en.xml IMF e-Library