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Are Devaluations Contractionary in Small Import-dependent Economies? Evidence from Botswana

Botswana Journal of Economics

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Field Value
 
Title Are Devaluations Contractionary in Small Import-dependent Economies? Evidence from Botswana
 
Creator Galebotswe, O
Andrias, T
 
Subject contractionary devaluation, error-correction model, small import-dependent economy
 
Description This study tests the contractionary devaluation hypothesis in the context of a small open import-dependent economy. Using an error-correction model that controls for monetary policy, fiscal policy, base country output and interest rates, the study finds that currency devaluations are contractionary in the long run and expansionary in the short-run. Other results are that increases in government consumption expenditure and base country output are expansionary, while monetary policy has the expected negative output effect.Keywords: contractionary devaluation, error-correction model, small import-dependent economy
 
Publisher The Botswana Economics Association
 
Contributor
 
Date 2012-01-09
 
Type info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
Peer-reviewed Article
 
Format application/pdf
 
Identifier https://www.ajol.info/index.php/boje/article/view/72979
 
Source Botswana Journal of Economics; Vol 8, No 12 (2011); 86-98
1810-0163
1810-0163
 
Language eng
 
Relation https://www.ajol.info/index.php/boje/article/view/72979/61870
 
Rights Copyright for content published in the journal is held by The Botswana Economics Association