Date Published:
Jun 01, 1984
Category:
Staff Papers
Focus Area(s):
Code:
SP 1984-06

Based on the assumption that the economy undertaking the devaluation is a small open economy, this paper presents the following model: monetarist small country model with importables and exportables but without non-tradables, monetarist small country model with importables and exportables but with non-tradables and model of sticky prices of non-traded goods. While devaluation could still improve the trade balance as suggested by these models, analysis of the effects of devaluation in a small open economy using the models presented here is more appropriate than those on the traditional elasticities approach.



Main Menu

Secondary Menu