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Devaluation Crises and the Macroeconomic Consequences of Postponed Adjustment in Developing Countries / Sebastian Edwards, Peter Montiel, National Bureau of Economic Research.
- Format:
- Book
- Author/Creator:
- Edwards, Sebastian, 1953- author.
- Montiel, Peter J., 1951- author.
- National Bureau of Economic Research, author.
- Series:
- Working paper series (National Bureau of Economic Research) ; number 2866.
- Working paper series (National Bureau of Economic Research) ; number 2866
- Language:
- English
- Subjects (All):
- Devaluation of currency.
- Economic history.
- Physical Description:
- 1 online resource (42 pages) : illustrations.
- Place of Publication:
- Cambridge, Massachusetts : National Bureau of Economic Research, 1989.
- Summary:
- This paper develops our analytical model to explore the relationship between the dynamics of macroeconomic adjustment and the timing of the implementation of an adjustment program featuring an official devaluation. The effects of postponing adjustment depend on the source of the original shock. In the case of fiscal expansion, postponement implies a larger eventual official devaluation and greater deviations of macroeconomic variables from their steady-state values. For adverse terms of trade shocks, postponement does not affect the size of the eventual official devaluation, but does magnify the amount of post-devaluation overshooting by key macroeconomic variables.
- Notes:
- Description based on publisher supplied metadata and other sources.
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