Devaluations, output and the balance sheet effect : a structural econometric analysis
Tovar Mora, Camilo Ernesto (Author)

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This paper estimates a new open economy macroeconomic model for South Korea to determine the output effect of currency devaluations. Three transmission mechanisms are considered: the expenditure-switching, the balance sheet, and a monetary channel associated to a nominal exchange rate target. Devaluations are defined as an increase in this target. This allows to isolate the effects of an explicit exogenous devaluationary policy shock. Ceteris paribus, a devaluation is found to be expansionary. Output contractions in South Korea should then be associated with a different shock such as an adverse shock on the international interest rate or on export demand.

Keywords:Koreja, ekonomska politika, monetarna politika, valuta, devalvacija, bilanca stanja, inflacija, obrestna mera, makroekonomija, ekonometrija, analiza, Korea, economic policy, monetary policy, currency, devaluation, balance sheet, inflation, interest rate, macroeconomics, econometrics, analysis
Work type:Not categorized (r6)
Organization:EF - Faculty of Economics
Publisher:Bank for International Settlements
Number of pages:41 str.
Place:Basel (Switzerland)
COBISS.SI-ID:17680102 Link is opened in a new window
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