On the Effect of Devaluation During Stabilization Programs in LDCs
The Review of Economics and Statistics
1992
This paper is a cross-section study of the effect of real devaluations on capacity utilization during stabilization programs in LDCs. It finds that such devaluations had a significant negative effect on output as predicted in many recent papers. This was not because devaluation caused a rise in aggregate saving but more because of a sharp contraction in investment. External factors, such as terms of trade and the capacity to import, had a significant positive impact while monetary and fiscal policy played only a minor role. Copyright 1992 by MIT Press.
- DOI
- 10.2307/2109538
- Volume
- 74 (1)
- Pages
- 21
- Export
- BibTeX
- Sources
- crossref openalex