Exchange rate policy and devaluation in Malawi:
AbstractThis study demonstrates why devaluation was ultimately necessary in Malawi and also what its eventual impact might be in terms of prices, income distribution, and domestic production. Our approach is to use a computable general equilibrium (CGE) model to evaluate the economywide impacts of foreign exchange shortages in Malawi under two alternative exchange rate regimes. The foreign exchange shortages are modeled by simulating the effect of actual shocks, including tobacco price declines and reductions in direct budgetary support or foreign direct investments. We then evaluate the economyâ€™s response to these shocks under a fixed exchange rate regime and a flexible exchange rate regime.
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Bibliographic InfoPaper provided by International Food Policy Research Institute (IFPRI) in its series IFPRI discussion papers with number 1253.
Date of creation: 2013
Date of revision:
exchange rate; Devaluation of currency; foreign exchange rationing; Currencies; Computable General Equilibrium (CGE) model; Economic policy;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-04-13 (All new papers)
- NEP-DEV-2013-04-13 (Development)
- NEP-MON-2013-04-13 (Monetary Economics)
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- Greenwell Collins Matchaya & Pius Chilonda & Sibusiso Nhelengethwa, 2013. "International Trade and Income in Malawi: A Co-integration and Causality Approach," International Journal of Economic Sciences and Applied Research (IJESAR), Technological Educational Institute (TEI) of Kavala, Greece, vol. 6(2), pages 125-147, September.
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