This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

The Fallacy of Composition and Contractionary Devaluations: The Output Impact of Real Exchange Rate Shocks in Developing Countries that Export Manufactures

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Robert A. Blecker () (Department of Economics, American University)
Arslan Razmi (Department of Economics, University of Massachusetts, Amherst)

Additional information is available for the following registered author(s):

Abstract

This paper studies whether intra-developing country price competition has significant effects on the short-run growth of output in developing countries that are specialized in manufactured exports. Regression estimates using the generalized method of moments (GMM) applied to annual panel data for 17 developing countries in 1983-2004 show that these countries exhibit a ‘fallacy of composition’, in the sense that a real depreciation relative to competing developing country exporters increases the home country’s growth rate in the short run. The results also suggest that real depreciations for these developing countries relative to the industrialised countries are contractionary.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.american.edu/cas/econ/workingpapers/2007-02.pdf
File Format: application/pdf
File Function: First version, 2007
Download Restriction: no

Publisher Info
Paper provided by American University, Department of Economics in its series Working Papers with number 2007-02.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 45 pages
Date of creation: Jan 2007
Date of revision:
Handle: RePEc:amu:wpaper:0207

Contact details of provider:
Web page: http://www.american.edu/cas/economics/

For technical questions regarding this item, or to correct its listing, contact: (Thomas Meal).

Related research
Keywords: Real exchange rates; fallacy of composition; terms of trade; manufactured exports; contractionary devaluations; competitive devaluations;

Find related papers by JEL classification:
O11 - Economic Development, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
O14 - Economic Development, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
F32 - International Economics - - International Finance - - - Current Account Adjustment; Short-term Capital Movements

Statistics
Access and download statistics

Did you know? Apart from a small start up grant in the 1990's, RePEc has received no funding and lives on the help of volunteers.

This page was last updated on 2009-11-23.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.