Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries

Carmen Reinhart

IMF Staff Papers, 1995, vol. 42, issue 2, 290-312

Abstract: Devaluation is an integral part of adjustment in many developing countries, particularly relied upon by countries facing large external imbalances. A devaluation can only reduce trade imbalances if it translates to a real devaluation and if trade flows respond to relative prices in a significant and predictable manner. However, a recent strand in the empirical trade literature has questioned the existence of a stable relationship between trade flows and its traditional determinants. This paper re-examines the relationship between relative prices and imports and exports in a sample of 12 developing countries.

JEL-codes: F11 F14 F31 F32 (search for similar items in EconPapers)
Date: 1995
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Working Paper: Devaluation, Relative Prices, and International Trade: Evidence from Developing Countries (1995)
Working Paper: Devaluation, Relative Prices, and International Trade: Evidence From Developing Countries (1994)
Working Paper: Devaluation, Relative Prices, and International Trade (1994)
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