01900cas a2200265 a 4500 AALejournalIMF007071 230101c9999 xx r poo 0 0eng d 5.00 USD 9781455218967 1018-5941 BD-DhAAL BD-DhAAL Sandri, Damiano. Current Account Rebalancing and Real Exchange Rate Adjustment Between the U.S. and Emerging Asia / Damiano Sandri, Pau Rabanal, Isabelle Mejean. Washington, D.C. : International Monetary Fund, 2011. 1 online resource (29 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 A reduction in the U.S. current account deficit vis-a-vis emerging Asia involves a shift in demand from U.S. to emerging Asia tradable goods and a change in international relative prices. This paper quantifies the required adjustment in the terms of trade and real exchange rates in a three-country open economy model of the U.S., China, and other emerging Asia. We compare scenarios where both Chinese and other emerging Asian export prices change by the same proportion to the case where export prices remain constant in one country and increase in the other. Our results are robust to different assumptions about elasticities of substitution and to introducing a high degree of vertical fragmentation in production in the model. Mode of access: Internet Mejean, Isabelle. Rabanal, Pau. IMF Working Papers; Working Paper ; No. 2011/046 Full text available on IMF http://elibrary.imf.org/view/journals/001/2011/046/001.2011.issue-046-en.xml IMF e-Library