Date Published:
Jun 01, 1992
Category:
Working Papers
Focus Area(s):
Author(s):
Code:
WP 1992-09

Since the late 1960s, there has been strong resistance from several quarters against any form of devaluation. While many empirical studies corroborate their sentiments, this paper attempts to show that if exchange rates were fixed, then it would be misleading to use them in macro-supply equations to represent the shadow exchange rate or as a measure of the scarcity of foreign exchange. The macro model presented here shows that that devaluation being contractionary is not necessarily true because it increases the domestic costs of imports. Hence, it is important that devaluation is not accompanied by contractionary policies.

Citations

This publication has been cited 3 times

In other Publications
  1. Cororaton, Caesar B.. 1997. Exchange rate movements in the Philippines. Discussion Papers DP 1997-05. Philippine Institute for Development Studies.
  2. Milo, Melanie S.. 1999. Contagion effects of the Asian crisis, policy responses and their implications. Philippine Journal of Development JPD, 26, no. 2-c. Philippine Institute for Development Studies..
  3. Milo, Melanie S.. 1999. Contagion effects of the Asian crisis, policy responses and their implications. Discussion Papers DP 1999-32. Philippine Institute for Development Studies.


Main Menu

Secondary Menu