She not only coined the phrase "beggar-my-neighbour", but concluded that so-called competitive devaluations
would be unsuccessful in achieving their advertised objectives.
Financial markets both in Egypt and abroad are already pricing in a devaluation
of the pound as reflected in interest rate levels.
They said that devaluations
do not work because the real effects get eaten up by rising inflation, and that is true if the central bank continues to print money to fuel inflation when the economy is near full employment.
Angola's central bank devalued the kwanza by about 4 percent and tightened US dollar liquidity in September, after a devaluation
of 6 percent in June.
As of now, fears of devaluations
and currency wars are vastly exaggerated.
2012), "Fiscal Devaluations
in EMU", BBVA Research Working Paper 11.
The textbook definition of currency devaluation
, according to Investopedia , is:
Pakistan being a net import has put further pressure on reserves for import payments with the devaluation
In that case, devaluations
(exchange rate depreciations) are contractionary to the economy.
Effect of currency devaluations
on INROs daily market indicator price
However, I am deeply sceptical of devaluations
having expansionary effects on output.
In most emerging economies (where devaluations
tend to be more common), sophisticated industrial machinery is often imported as a matter of necessity.