Are devaluations effective in inducing real depreciations in sub-Saharan Africa?
Abstract
The analysis of this paper, with pooled data for 20 countries in sub-Saharan Africa during 1971-1991, indicates that nominal devaluations are effective in inducing permanent depreciations in the real exchange rate (RER). A 10% nominal devaluation of the domestic currency (expressed in units per US dollar) translates into a real depreciation of 8.8 and 7.7% in the short and long run, respectively. It is also established that the RER appreciates with an increase in inflation tax. A policy implication of these results is that nominal devaluations are effective in keeping the RER close to a level that maintains external competitiveness, if accompanied by appropriate restrictive monetary and fiscal policies.Download Info
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Bibliographic Info
Article provided by Taylor and Francis Journals in its journal Applied Economics Letters.
Volume (Year): 2 (1995)
Issue (Month): 11 ()
Pages: 437-439
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Handle: RePEc:taf:apeclt:v:2:y:1995:i:11:p:437-439
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For corrections or technical questions regarding this item, or to correct its listing, contact: (Michael McNulty).
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Weshah Razzak, 2009.
"On the GCC Currency Union,"
EERI Research Paper Series
EERI_RP_2009_29, Economics and Econometrics Research Institute (EERI), Brussels.
- Weshah Razzak, . "On the GCC Currency Union," API-Working Paper Series 0910, Arab Planning Institute - Kuwait, Information Center.
- Weshah Razzak, .
"In the Middle of the Heat The GCC Countries Between Rising Oil Prices and the Sliding Greenback,"
API-Working Paper Series
0801, Arab Planning Institute - Kuwait, Information Center.
- Razzak, W A, 2007.
"In The Middle of the Heat:The GCC countries Between Rising Oil Prices and the Sliding Greenback
[Same as above]," MPRA Paper 6591, University Library of Munich, Germany.
- Razzak, W A, 2007.
"In The Middle of the Heat:The GCC countries Between Rising Oil Prices and the Sliding Greenback
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