Geiger, MichaelNguyen, HaNguyen, Houng2018-11-282018-11-282018-10https://hdl.handle.net/10986/30918This paper examines the pros and cons of gradual versus big-bang approaches toward devaluations. It presents original empirical evidence regarding output, consumption, investment and trade balances associated with gradual and big-bang devaluation episodes. It finds that big-bang devaluations are associated with lower output, investment and consumption, while gradual devaluations are not associated with any contemporaneous drops. Five case studies of gradual devaluations are also conducted.CC BY 3.0 IGOCURRENCY DEVALUATIONMONETARY POLICYTRADE BALANCEINVESTMENTCAPITAL FLOWSCONSUMPTIONFISCAL POLICYWorking PaperWorld Bank10.1596/30918