The Effect of External Positions on FX Misalignments: A study of the G10 countries applying the Macroeconomic Balance Approach
The aim of this paper is to investigate if the macroeconomic balance approach will generate different misalignments whether net foreign assets or cumulative current account is applied. The dataset consist of the G10 countries and range from 1981 to 2011. The relevant determinants of the current account are found to be fiscal balance, population growth, net foreign assets, cumulative current accoun
