The Distributional Consequences of Large Devaluations
Javier Cravino () and
No 23409, NBER Working Papers from National Bureau of Economic Research, Inc
We study the impact of large exchange rate devaluations on the cost of living at different points on the income distribution. Poor households spend relatively more on tradeable product categories, and consume lower-priced varieties within categories. Changes in the relative price of tradeables and of lower-priced varieties affect the cost of living of low-income relative to high-income households. We quantify these effects following the 1994 Mexican devaluation and show that they can have large distributional consequences. Two years post-devaluation, the cost of living for the bottom income decile rose 1.48 to 1.62 times more than for the top income decile.
JEL-codes: F31 F61 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mon and nep-opm
Note: IFM ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2) Track citations by RSS feed
Published as Javier Cravino & Andrei A. Levchenko, 2017. "The Distributional Consequences of Large Devaluations," American Economic Review, vol 107(11), pages 3477-3509.
Downloads: (external link)
Journal Article: The Distributional Consequences of Large Devaluations (2017)
Working Paper: The Distributional Consequences of Large Devaluations (2017)
Working Paper: The distributional consequences of large devaluations (2016)
Working Paper: The Distributional Consequences of Large Devaluations (2015)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:23409
Ordering information: This working paper can be ordered from
Access Statistics for this paper
More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().