Economics at your fingertips  

Could Changes in Black Market Exchange Rates be Expansionary in LDCs?

Mohsen Bahmani-Oskooee (), Ilir Miteza and Gour Goswami ()

Economics Bulletin, 2008, vol. 6, issue 13, 1-9

Abstract: Many of the previous studies that tried to assess the contractionay or expansionary effects of depreciations or devaluations in less developed countries (LDCs) used official exchange rate data and concluded that devaluations are contractionary in LDCs. However, due to capital controls, there is a black market for foreign exchange in many of the LDCs. In this paper when we use black market rates over the period 1975-1998 from 29 LDCs in a panel model, we find that devaluations are expansionary. Thus, for an effective exchange rate policy the official and black market exchange rates should be unified.

JEL-codes: F3 F3 (search for similar items in EconPapers)
Date: 2008-03-26
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

More articles in Economics Bulletin from AccessEcon
Bibliographic data for series maintained by John P. Conley ().

Page updated 2019-06-13
Handle: RePEc:ebl:ecbull:eb-07f30023