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Periodical article | Leiden University catalogue | WorldCat |
Title: | On the Relation between Nominal Devaluation and Real Devaluation: Evidence from African Countries |
Authors: | Bahmani-Oskooee, Mohsen Gelan, Abera |
Year: | 2007 |
Periodical: | Journal of African Economies |
Volume: | 16 |
Issue: | 2 |
Period: | March |
Pages: | 177-197 |
Language: | English |
Geographic term: | Africa |
Subjects: | devaluation Economics and Trade |
External link: | https://jae.oxfordjournals.org/content/16/2/177.full.pdf |
Abstract: | A country devalues its currency with an expectation that it will gain international competitiveness and increase its exports. However, the inflationary effects of devaluation could curtail its favourable effects unless nominal devaluation leads to real devaluation. The authors consider the experiences of 21 African countries. After constructing the real and nominal effective exchange rates over the 1971-2004 period, they employ the bounds-testing approach to cointegration and show that in almost all countries nominal devaluation leads to real devaluation in the short run. However, the short-run effects last into the long run only in three countries, viz. Burundi, Kenya and the Seychelles. Bibliogr., notes, ref., sum. [Journal abstract] |