Adjustment to devaluation with money and nontraded goods

Michael Connolly, Dean Taylor

Research output: Contribution to journalArticlepeer-review

31 Scopus citations


This paper analyzes the dynamics of adjustment to devaluation in a framework which highlights the role played by nontraded goods and money. We provide a specific analytical model of devaluation incorporating substitution effects in production and consumption as well as liquidity effects resulting from a stock-flow adjustment process. The analysis provides specific solutions for the time path of the balance of payments and the price of nontraded goods following devaluation.

Original languageEnglish (US)
Pages (from-to)289-298
Number of pages10
JournalJournal of International Economics
Issue number3
StatePublished - Aug 1976
Externally publishedYes

ASJC Scopus subject areas

  • Finance
  • Economics and Econometrics


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