Gradual Versus Big-Bang Devaluations : An Empirical Analysis
This paper examines the pros and cons of gradual versus big-bang approaches toward devaluations. It presents original empirical evidence regarding output, consumption, investment and trade balances associated with gradual and big-bang devaluation e...
| Main Authors: | , , |
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| Format: | Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2018
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/844181541168364950/Gradual-Versus-Big-Bang-Devaluations-An-Empirical-Analysis http://hdl.handle.net/10986/30918 |
| Summary: | This paper examines the pros and cons of
gradual versus big-bang approaches toward devaluations. It
presents original empirical evidence regarding output,
consumption, investment and trade balances associated with
gradual and big-bang devaluation episodes. It finds that
big-bang devaluations are associated with lower output,
investment and consumption, while gradual devaluations are
not associated with any contemporaneous drops. Five case
studies of gradual devaluations are also conducted. |
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