Devaluation, pass-through and foreign reserves dynamics in a tourism economy

Chi-Chur Chao, Lee-Jung Lu, Ching-chong Lai, Shih Wen Hu and Vey Wang

Economic Modelling, 2013, vol. 30, issue C, 456-461

Abstract: This paper examines the effects of currency devaluations on goods prices and foreign reserves for a small-open economy with inbound tourism. Tourism transforms non-traded goods into exportable goods. Devaluations yield an over pass-through to the prices of the non-traded tourism goods. This may hurt the trade balance and hence lead to a decline in foreign reserves for the economy.

Keywords: Tourism; Exchange rate; Pass-through (search for similar items in EconPapers)
JEL-codes: F31 L83 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:30:y:2013:i:c:p:456-461

DOI: 10.1016/j.econmod.2012.09.050

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