Devaluation, Relative Prices, and International Trade Report as inadecuate




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Abstract

Devaluation is an integral part of adjustment in many developing countries, particularly relied upon by countries facing large external imbalances. A devaluation can only reduce trade imbalances if it translates to a real devaluation and if trade flows respond to relative prices in a significant and predictable manner. However, a recent strand in the empirical trade literature has questioned the existence of a stable relationship between trade flows and its traditional determinants. This paper re-examines the relationship between relative prices and imports andexports in a sample of 12 developing countries.



Item Type: MPRA Paper -

Original Title: Devaluation, Relative Prices, and International Trade-

Language: English-

Keywords: exports imports devaluation world growth competitiveness-

Subjects: F - International Economics > F1 - TradeF - International Economics > F4 - Macroeconomic Aspects of International Trade and Finance > F43 - Economic Growth of Open Economies-





Author: Reinhart, Carmen

Source: https://mpra.ub.uni-muenchen.de/13708/







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