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The efficacy of devaluation as a short-run policy tool (الإنجليزية)

The paper systematically examines the major devaluations of the l960-80 period to determine the influence of different policies--fiscal, credit and commercial--on the short and medium run outcome of a devaluation. An erosion index is constructed to measure the extent to which a nominal currency depreciation causes a real depreciation, and to measure the erosion of the impact effect over time. The empirical evidence strongly suggests that the real exchange rate effect of a nominal devaluation is only partially eroded in the short run. A "before and after" approach is employed to evaluate the effect on the external sector, output, consumption and investment. The empirical evidence indicates that in general devaluing countries have experienced a favorable effect on the trade balance, output and investment and an adverse effect on consumption irrespective of the behavior of accompanying policies. Contractionary fiscal and expansionary credit growth policies systematically tend to reinforce, in the longer run, the positive influence upon the trade balance and the negative influence upon consumption respectively. Expansionary fiscal policy tends to offset the positive effect on output growth in the short run.


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نسخة رسمية من الوثيقة (قد تضم توقيعات، الخ)