Competitive devaluations: toward a welfare-based approach

• 成果类型: Article; Proceedings Paper
• 署名作者: Corsetti, G; Pesenti, P; Roubini, N; Tille, C
• 署名单位: University of Bologna; Yale University; Federal Reserve System - USA; Federal Reserve Bank - New York; National Bureau of Economic Research; New York University; Center for Economic & Policy Research (CEPR); National Bureau of Economic Research
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/S0022-1996(99)00043-4
• 发表日期: 2000
• 页码: 217-241
• 关键词: competitive devaluations; Exchange rate shocks; contagion; global trade links; Law of one price

摘要

This paper revisits the international transmission of exchange rate shocks in a multicountry economy, providing a choice-theoretic framework for the policy analysis of competitive devaluations. As opposed to the traditional view, a devaluation by one country does not necessarily have an adverse beggar-thy-neighbor effect on its trading partners, because they can benefit from an improvement in their terms of trade. Furthermore, a retaliatory devaluation need not be the optimal strategy for the neighbor countries, as the induced terms of trade deterioration can be large enough to offset the gains from defending their export market share.