Publication: Can Real Exchange Rate Undervaluation Boost Exports and Growth in Developing Countries? Yes, But Not for Long
Date
2010-06
ISSN
Published
2010-06
Author(s)
Haddad, Mona
Pancaro, Cosimo
Abstract
A policy of managed real undervaluation
may have been an important factor behind the success of East
Asia's export-led growth model. But current discussions
over the value of China's currency demonstrate the
controversy this kind of policy can generate. Although a
managed real undervaluation can enhance domestic
competitiveness, it is difficult to sustain both
economically and politically in the post-crisis environment.
The authors show that a real undervaluation works only for
low-income countries, and only in the medium term.
Citation
“Haddad, Mona; Pancaro, Cosimo. 2010. Can Real Exchange Rate Undervaluation Boost Exports and Growth in Developing Countries? Yes, But Not for Long. Economic Premise; No. 20. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/3806ed44-f8d5-5cf2-aad5-8c80864542d1 License: CC BY 3.0 IGO.”