학술저널
Liberalized Exchange Rate Management System and Devaluation in India: Trade Balance Effect
Liberalized Exchange Rate Management System and Devaluation in India: Trade Balance Effect
- 세종대학교 경제통합연구소
- Journal of Economic Integration
- 제9권 제4호
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1994.12534 - 542 (9 pages)
- 0
This paper examines the short run trade balance effects of the recent exchange rate policies in India in terms of the extended Jones-Corden [1976] model. With rigidity of money wage rate as the target of concurrent fiscal policy, a change in the LERMS formula improves trade balance only if non-trade-ables are relatively labour-intensive. A devaluation might still fail to improve trade balance, on the other hand, in presence of imported input. The Jones-Corden condition thus gets modified in presence of imported input.
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