Exchange Rate Devaluation and Reshuffling of Global Jobs

Luca Macedoni and Fabio Sdogati ()
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Fabio Sdogati: Dipartimento di Ingegneria Gestionale, Politecnico di Milano, Postal: Via Lambruschini 4b 20156 Milano, Italy

Journal of Economic Integration, 2013, vol. 28, 241-268

Abstract: Current debates presume that devaluation of one country’s currency may transfer the production of imported intermediate goods to the devaluating country. This paper argues that in a global production network involving more than two countries in the production of fragments, this presumption may not hold. With a simple Ricardian model of fragmentation, this paper shows that the production of fragments can be transferred only if countries have close comparative advantage. Using data from the World Input Output Database, our model is found to be empirically supported.

Keywords: International Fragmentation of Production; Exchange Rate (search for similar items in EconPapers)
JEL-codes: F10 (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0599

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