What Do We Know of Trade Elasticities?

Hafsa Hina
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Hafsa Hina: Pakistan Institute of Development Economics

No 2021:30, PIDE Knowledge Brief from Pakistan Institute of Development Economics

Abstract: Devaluation[2] is necessitated only when policy weakness leads to a loss of reserves. It takes on a harsher form when central banks refuse to recognize the will of the market and spends reserves to preserve an artificial value of the exchange rate. Ill-informed popular debate appears to hold to the notion that the purpose of a devaluation is to devalue to improve the trade balance and as they say �improve competitiveness.�

Keywords: Real Exchange Rate; Trade Balance; Elasticities (search for similar items in EconPapers)
Pages: 8 pages
Date: 2021
New Economics Papers: this item is included in nep-int
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