The Effects of Exchange Rate Fluctuations on Output and Prices: Evidence from Developing Countries

Magda Kandil and Ida Mirazaie
Additional contact information
Ida Mirazaie: Interbational Monetary Fund,USA

Journal of Developing Areas, 2004, vol. 38, issue 2, 189-219

Abstract: The paper examines the effects of exchange rate fluctuations on real output and prices in a sample of 33 developing countries. The theoretical model decomposes movements in the exchange rate into anticipated and unanticipated components. Unanticipated currency fluctuations determine aggregate demand through exports, imports, and the demand for domestic currency, and determine aggregate supply through the cost of imported intermediate goods. Anticipated exchange rate depreciation, through the supply channel, has limited effects on output growth and price inflation. Unanticipated currency fluctuations appear more significant, with varying effects on output growth and price inflation across developing countries.

Keywords: exchange rate; anticipated vs. unanticipated appreciation; supply vs. demand channels; real and inflationary effects (search for similar items in EconPapers)
JEL-codes: E31 F41 F43 (search for similar items in EconPapers)
Date: 2004
References: Add references at CitEc
Citations:

Downloads: (external link)
http://muse.jhu.edu/journals/jda/summary/v038/38.2kandil.html

Related works:
Working Paper: The Effects of Exchange Rate Fluctuationson Output and Prices: Evidence From Developing Countries (2003)
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: https://EconPapers.repec.org/RePEc:jda:journl:vol.38:year:2004:issue2:pp:189-219

Access Statistics for this article

More articles in Journal of Developing Areas from Tennessee State University, College of Business Contact information at EDIRC.
Bibliographic data for series maintained by Abu N.M. Wahid ().