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Exchange Rate Undervaluation and Manufactured Exports: A Deliberate Strategy?

Author

Listed:
  • SEKKAT
  • Patrick PLANE

    (Centre d'Etudes et de Recherches sur le Développement International(CERDI))

  • Ridha NOUIRA

Abstract

Recent literature suggests that a proactive exchange rate policy in accordance with price incentives (i.e. undervaluation) can foster manufactured exports and growth. This paper is built on these recent developments and investigates, using a sample of 52 developing countries, whether such a proactive exchange rate policy is adopted. The results show that during the period 1991-2005 a number of countries has used undervaluation to foster the price competitiveness of manufactured exports.

Suggested Citation

  • SEKKAT & Patrick PLANE & Ridha NOUIRA, 2011. "Exchange Rate Undervaluation and Manufactured Exports: A Deliberate Strategy?," Working Papers 201125, CERDI.
    • Handle: RePEc:cdi:wpaper:1281
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    More about this item

    Keywords

    Exchange rate; Misalignment; Undervaluation; Exports diversification;
    All these keywords.

    JEL classification:

    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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