The Myth of Competitive Devaluations in the 1930s

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Conventional wisdom pretends that currency devaluations contributed to the Great Depression of the 1930s. This paper examines the impact of nominal exchange rates on foreign trade of 14 industrialized countries 1929-1939. If the idea of competitive devaluation holds, one should expect an increase in exports, along with a decline in imports, to trading partners against which the exchange rate depreciated. Tests show that the beggar-thy-neighbour effects of exchange rate adjustments were at most marginal. Moreover, there is evidence that currency depreciations were expansionary not only for countries that devalued but for the international economy as a whole.
Antal sidor36
StatusPublished - 2020


NamnLund Papers in Economic History. General Issues
FörlagDepartment of Economic History, Lund University

Ämnesklassifikation (UKÄ)

  • Ekonomisk historia


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