Devaluation, Inflationary Expectations and Stabilisation in Peru

Roca, Santiago; Priale, Rodrigo

doi:10.1108/eb002640

Cited by 6 publications

(6 citation statements)

References 2 publications

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“…Gylfason and Risager (1984), Branson (1986), Solimano (1986), Roca and Priale (1987), Horton and McLaren (1989), and Gylfason and Radetzki (1991) provide evidence from macroeconomic models of the effect of exchange rate devaluation on the trade balance. Apart from Gylfason and Risager (1984) and Gylfason and Radetzki (1991), the results of these studies show that devaluation worsens the trade balance or balance of payments.…”

Section: Literature Reviewmentioning

confidence: 96%

Does Currency Devaluation Improve the Trade Balance in the Long Run? Evidence from Malawi

Musila

Newark

2003

African Development Review

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This paper explores the impact of nominal exchange rate devaluation on the trade balance for Malawi. A small-open economy IS-LM aggregate supply model of Malawi estimated using time series data covering the period 1967-96 is used in the simulation analysis. The results of the simulation experiment show that devaluation helps to improve export performance and to curtail the growth of imports in the long run, which lead to improvement in the trade balance position. The results provide evidence supporting the view that nominal devaluation can indeed be a quite powerful tool in minimizing the imbalances in Malawi's international trade.Re´sume´: Le pre´sent article analyse l'incidence de la de´valuation du taux de change nominal sur la balance commerciale du Malawi. Ses auteurs se servent d'un mode`le IS-ML d'entreprise en e´conomie ouverte spe´cialise´e dans la fourniture d'agre´gats, cense´utiliser des donne´es chronologiques concernant la pe´riode 1967 a`1996, a pour effectuer cette analyse. Les re´sultats de cet exercice de simulation montrent que la de´valuation contribue, a`long terme, a`ame´liorer la qualite´des exportations -et, partant, la situation de la balance commerciale -et a`freiner la croissance des importations. Ils viennent, en outre, appuyer la the´orie selon laquelle la de´valuation peut, en re´alite´, contribuer sensiblement a`re´duire les de´se´quilibres du commerce international au Malawi.

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Section: Literature Reviewmentioning

confidence: 96%

Does Currency Devaluation Improve the Trade Balance in the Long Run? Evidence from Malawi

Musila

Newark

2003

African Development Review

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“…The macro-simulation approach (Gylfason and Schmid, 1983;Gylfason and Risager, 1984;Solimano, 1986;and Roca and Priale, 1987). This approach uses simulation models to analyze the impact of exchange rate changes on output.…”

Section: Introductionmentioning

confidence: 99%

“…Solimano (1986) constructed a macroeconomic model for Chile and concluded that devaluation was contractionary in the short to medium run. Roca and Priale (1987) constructed a macroeconomic model for the Peruvian economy and concluded that devaluations were contractionary.…”

Section: Introductionmentioning

confidence: 99%

Effects of the Exchange Rate on Output and Price Level: Evidence from the Pakistani Economy

Choudharyv¹,

Chaudhry²

2007

LJE

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The question of whether devaluation of the currency affects output positively or negatively has received considerable attention both from academic and empirical researchers. A number of empirical studies have supported the contractionary devaluation hypothesis using pooled time series data from a large number of heterogeneous countries. Since the effects of devaluation on output and the price level may not be uniform across all developing countries, the empirical results can not be generalized for all countries. In addition, almost none of the empirical studies used to test the contractionary devaluation hypothesis separate the effects of devaluation from import prices. Thus, a country specific study is needed that separate the effects of devaluation from the import price effects. This paper uses a VEC model to analyze the effects of the exchange rate on output and the price level in Pakistan for the period 1975-2005. Our analysis shows that devaluation has a positive effect on output but a negative effect on the price level. Thus, the evidence presented in this paper does not support the contractionary devaluation hypothesis for the Pakistani economy.

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“…(1976) observed that currency devaluation can affect tax collection on both sides (increase or decrease).The behavior depends upon the impact of tax on supply chain and value chain and velocity of circulation of money. Aghevli and Khan (1978), Gulhati et al (1986) studied this phenomenon in India , Roca and Priale (1987) in their study on Peru, Hossain (1987) in his study on Bangladesh found similar results. Liam P. Ebrill and Janet Gale Stotsky (1999) found that deprecation of local currency leads to decrease in taxes on trade.…”

Section: Introductionmentioning

confidence: 80%

Depreciation of Pak Rupee and Its Effects on Tax Collection by FBR

Munir

Ishaq

Khalid

et al. 2021

READS

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This research paper is an attempt to analyze the effect of rupee depreciation on total tax col-lection and on types of tax collection. This study employed ARDL methodology on empirical data of Pakistan for the period of 1990 to 2018 and found that depreciation of Pak rupee negatively affects overall tax collection both in short term and long term. Its effect is particularly detrimental in case of income tax and custom duty. In case of income tax it deteriorates tax collection by reducing real income of persons and businesses and in case of customs it reduces tax collection by making imports costly. It is also found that depreciation of currency negatively effects tax collection from agriculture, industry, services and imports whereas it positively effects tax collection from consumption, CPI, remittances and interest rates.

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Devaluation, Inflationary Expectations and Stabilisation in Peru

Cited by 6 publications

References 2 publications

Does Currency Devaluation Improve the Trade Balance in the Long Run? Evidence from Malawi

Does Currency Devaluation Improve the Trade Balance in the Long Run? Evidence from Malawi

Effects of the Exchange Rate on Output and Price Level: Evidence from the Pakistani Economy

Depreciation of Pak Rupee and Its Effects on Tax Collection by FBR

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