Are Real Devaluations Contractionary? an Empirical Analysis for Pakistan
The failure of Bretton Woods system in 1970s diverted the attention of the researchers and policy makers from the orthodox wisdoms of elasticities, absorptions and Keynesian towards the new structuralist theories of contractionary depreciations. The present study has been carried out to test this contractionary hypothesis of real depreciations for Pakistan in the framework of a three version IS curve approach by using annual data over the period, 1973-2008. The main finding of the study is that real depreciation increases the output gap in Pakistan. The results also show that movement towards a more flexible exchange rate regimes also raises the output gap.
Volume (Year): 2 (2012)
Issue (Month): 1 (March)
|Contact details of provider:|| Postal: Sadeeq Block, Near Fawara Chowk, Abbasia Town, Rahim Yar Khan - 64200, Punjab, Pakistan|
Web page: http://www.aessweb.com/
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Betts, Caroline & Devereux, Michael B., 1996. "The exchange rate in a model of pricing-to-market," European Economic Review, Elsevier, vol. 40(3-5), pages 1007-1021, April.
- Lars E. O. Svensson, 2000.
"Open-Economy Inflation Targeting,"
NBER Working Papers
6545, National Bureau of Economic Research, Inc.
- Svensson, Lars E.O., 1998. "Open-Economy Inflation Targeting," Seminar Papers 638, Stockholm University, Institute for International Economic Studies.
- Svensson, L.E.O., 1998. "Open-Economy Inflation Targeting," Papers 638, Stockholm - International Economic Studies.
- Svensson, Lars E O, 1998. "Open-Economy Inflation Targeting," CEPR Discussion Papers 1989, C.E.P.R. Discussion Papers.
- Sebastian Edwards, 1985.
"Are Devaluations Contractionary?,"
NBER Working Papers
1676, National Bureau of Economic Research, Inc.
- Ghura, Dhaneshwar & Grennes, Thomas J., 1993. "The real exchange rate and macroeconomic performance in Sub-Saharan Africa," Journal of Development Economics, Elsevier, vol. 42(1), pages 155-174, October.
- Buffie, Edward F, 1986. "Devaluation and Imported Inputs: The Large Economy Case," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 123-40, February.
- Khan , Shahrukh R. & Aftab, Safiya, 1996. "Devaluation and the Balance of Trade: A Policy Analysis for Pakistan," Economia Internazionale / International Economics, Camera di Commercio di Genova, vol. 49(2), pages 247-260.
- Melander, Ola, 2009. "The Effects of Real Exchange Rate Depreciation in an Economy with Extreme Liability Dollarization," SSE/EFI Working Paper Series in Economics and Finance 715, Stockholm School of Economics, revised 28 Jul 2009.
- Gylfason, Thorvaldur & Risager, Ole, 1984. "Does devaluation improve the current account?," European Economic Review, Elsevier, vol. 25(1), pages 37-64, June.
- Guerrero, Federico, 2006. "Does inflation cause poor long-term growth performance?," Japan and the World Economy, Elsevier, vol. 18(1), pages 72-89, January.
- Steven B. Kamin & Marc Klau, 1998.
"Some multi-country evidence on the effects of real exchange rates on output,"
International Finance Discussion Papers
611, Board of Governors of the Federal Reserve System (U.S.).
- Steven B. Kamin & Marc Klau, 1997. "Some multi-country evidence on the effects of real exchange rates on output," BIS Working Papers 48, Bank for International Settlements.
- Solimano, Andres, 1986. "Contractionary devaluation in the southern cone : The case of Chile," Journal of Development Economics, Elsevier, vol. 23(1), pages 135-151, September.
- Sweder van Wijnbergen, 1986.
"Exchange Rate Management and Stabilization Policies in Developing Countries,"
in: Economic Adjustment and Exchange Rates in Developing Countries, pages 17-42
National Bureau of Economic Research, Inc.
- Van Wijnbergen, Sweder, 1986. "Exchange rate management and stabilization policies in developing countries," Journal of Development Economics, Elsevier, vol. 23(2), pages 227-247, October.
- Robert J. Barro, 2001. "Economic Growth in East Asia Before and After the Financial Crisis," NBER Working Papers 8330, National Bureau of Economic Research, Inc.
- Upadhyaya, Kamal P., 1999. "Currency devaluation, aggregate output, and the long run: an empirical study," Economics Letters, Elsevier, vol. 64(2), pages 197-202, August.
- repec:pid:journl:v:43:y:2004:i:4:p:757-770 is not listed on IDEAS
- Taye, Haile Kebret, 1999. "The Impact of Devaluation on Macroeconomic Performance: The Case of Ethiopia," Journal of Policy Modeling, Elsevier, vol. 21(4), pages 481-496, July.
- Thorvaldur Gylfason & Michael Schmid, 1983. "Does Devaluation Cause Stagflation?," Canadian Journal of Economics, Canadian Economics Association, vol. 16(4), pages 641-54, November.
- Gylfason, Thorvaldur & Radetzki, Marian, 1991. "Does Devaluation Make Sense in the Least Developed Countries?," Economic Development and Cultural Change, University of Chicago Press, vol. 40(1), pages 1-25, October.
When requesting a correction, please mention this item's handle: RePEc:asi:aeafrj:2012:p:119-134. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Qazi Muhammad Imran)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.