Publication: Can Real Exchange Rate Undervaluation Boost Exports and Growth in Developing Countries? Yes, But Not for Long
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2010-06
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2012-08-13
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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.
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“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. http://hdl.handle.net/10986/10178 License: CC BY 3.0 IGO.”
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