According to the conventional wisdom, when an economy enters a recession and nominal prices adjust slowly, the monetary authority should devalue the domestic currency to make the recession less severe. The reason is that a devaluation of the currency lowers the relative price of non-tradable goods, and this reduces the necessary adjustment in output relative to the case in which the exchange rate remains constant. This paper uses a simple small open...
انظر المزيد
تفاصيل
-
2009/5/01
-
ورقة عمل خاصة ببحوث السياسات
-
WPS4926
-
1
-
1
-
2010/7/01
-
Disclosed
-
Optimal devaluations
-
asset market