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Foreign Exchange Shadow Prices: A Critical Review of Current Theories


  • Edmar Bacha
  • Lance Taylor


I. Introduction, 197. — II. The welfare approach, 198. — III. Costs of producing foreign exchange, 207. — IV. Equilibrium and parity exchange rates, 213. — V. Comparisons of the methods and a recommended evaluation rule, 220.

Suggested Citation

  • Edmar Bacha & Lance Taylor, 1971. "Foreign Exchange Shadow Prices: A Critical Review of Current Theories," The Quarterly Journal of Economics, Oxford University Press, vol. 85(2), pages 197-224.
  • Handle: RePEc:oup:qjecon:v:85:y:1971:i:2:p:197-224.

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    Cited by:

    1. Narongchai Akrasanee, 1980. "Trade Strategy for Employment Growth in Thailand," NBER Chapters,in: Trade and Employment in Developing Countries, Volume 1: Individual Studies, pages 393-434 National Bureau of Economic Research, Inc.
    2. Roe, Terry L. & Greene, Duty D., 1986. "The Estimation Of A Shadow Equilibrium Exchange Rate: A Direct Method," Staff Papers 14124, University of Minnesota, Department of Applied Economics.
    3. Warr, Peter G., 1974. "The Economics Of Shadow Pricing: Market Distortions And Public Investment," Staff Papers 14116, University of Minnesota, Department of Applied Economics.
    4. Sebastian Edwards, 1987. "Economics Liberalization and the Equilibrium Real Exchange Rate in Developing Countries," UCLA Economics Working Papers 433, UCLA Department of Economics.
    5. Glenn Jenkins & Chun-Yan Kuo & Arnold C. Harberger, 2011. "Cost-Benefit Analysis for Investment Decisions: Chapter 9 (The Shadow Price of Foreign Exchange and Non-Tradable Outlays)," Development Discussion Papers 2011-09, JDI Executive Programs.
    6. Richard Dusansky & David Franck & Nadeem Naqvi, 2000. "The true shadow price of foreign exchange," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 24(2), pages 206-214, June.
    7. Sebastián Edwards, 1975. "Tipo de Cambio Sombra y Protección Efectiva: Un Cálculo Basado en la Metodología del Tipo de Cambio de Equilibrio bajo Libre Comercio," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 12(37), pages 127-144.
    8. Londero, Elio, 1987. "Benefits and Beneficiaries: An Introduction to Estimating Distributional Effects in Cost-Benefit Analysis (Second Edition)," MPRA Paper 60345, University Library of Munich, Germany, revised 1996.
    9. Haim Levy, 1979. "Project Evaluation, Government Intervention and the Price of Foreign Exchange," Revue Économique, Programme National Persée, vol. 30(1), pages 31-71.
    10. Ferreira, Leo da Rocha, 2003. "Social Exchange Rates, Mercosur And Economic Development," 2003 Annual Meeting, August 16-22, 2003, Durban, South Africa 25880, International Association of Agricultural Economists.

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