Currency collapses and output dynamics: a long-run perspective
Currency collapses, defined as large nominal depreciations or devaluations, are associated with permanent output losses on the order of 6% of GDP on average. In this feature, we argue that the fact that these losses tend to materialise before a drop in the value of the currency indicates that it is not the large depreciation as such that is costly but the factors leading to the currency collapse. Taken on its own, the drop in the exchange rate actually has a positive effect on output.
Volume (Year): (2010)
Issue (Month): (June)
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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.:
- Camilo E Tovar, 2006. "Devaluations, output and the balance sheet effect: a structural econometric analysis," BIS Working Papers 215, Bank for International Settlements.
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Working Paper Series
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- Matthieu Bussière & Sweta c Saxena & Camilo Tovar, 2010. "Chronicle of currency collapses: re-examining the effects on output," BIS Working Papers 314, Bank for International Settlements.
- Stephen G. Cecchetti & Marion Kohler & Christian Upper, 2009.
"Financial crises and economic activity,"
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