Swiss Economicblogs.org
On VoxEU, Stefan Avdjiev, Robert McCauley, and Hyun Song Shin discuss how a focus on net capital flows between countries can mislead policy analysts if they neglect heterogeneity between sectors in a country and/or non-congruence of economic and currency area that is, if they assume the “triple coincidence” between economic area, decision-making unit, and currency area. The triple coincidence misleads because it obscures gross flows, … in that it gives insufficient weight to international...
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