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EcoNontc RESPONSE TO DEVALUATION IN SELECTED DEVELOPING COUNTRIES

Author

Listed:
  • Shapouri, Shahla
  • McKaig, Nancy

Abstract

CDevaluations have been recommended as a means to strengthen the balance o'a- payments and improve the growth of commodity exports. The study of economic performance of 16 developing countries showed that adjustments in currency exchange-rate' policy improved their balance of payments. After devaluation, both exports and imports declined in most countries. The stronger rate of decline in imports contributed to substantial improvement in trade and current account deficits. The sharp decline in imports reduced domestic productivity so that the record of economic performance showed slower income growth in more than half of the countries. The predevaluation rates of inflation continued, or in some countries incread, because of slow income growth and higher prices of traded commodities.

Suggested Citation

  • Shapouri, Shahla & McKaig, Nancy, 1987. "EcoNontc RESPONSE TO DEVALUATION IN SELECTED DEVELOPING COUNTRIES," Staff Reports 277996, United States Department of Agriculture, Economic Research Service.
  • Handle: RePEc:ags:uerssr:277996
    DOI: 10.22004/ag.econ.277996
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    File URL: http://ageconsearch.umn.edu/record/277996/files/ers-report-325.pdf
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    References listed on IDEAS

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    1. Guitian, Manuel, 1976. "The effects of changes in the exchange rate on output, prices and the balance of payments," Journal of International Economics, Elsevier, vol. 6(1), pages 65-74, February.
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    Cited by:

    1. Shapouri, Shahla & Rosen, Stacey, 1989. "Export Performance In Africa," Staff Reports 278190, United States Department of Agriculture, Economic Research Service.

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