Commercial policy, the terms of trade and the real exchange rate revisited

John Devereux, Michael Connolly

Research output: Contribution to journalArticle

14 Scopus citations

Abstract

We estimate the effects of commercial policy and changes in the external terms of trade on the real exchange rate for four Latin American economies using data on internal relative prices. We find that the greater the elasticity of the non-traded price level with respect to the price of importables, the larger is the real exchange rate effect of import restrictions but the smaller is the real exchange rate effect of changes in the external terms of trade.

Original languageEnglish (US)
Pages (from-to)81-99
Number of pages19
JournalJournal of Development Economics
Volume50
Issue number1
DOIs
StatePublished - Jan 1 1996

    Fingerprint

Keywords

  • Commercial policy
  • Real exchange rate
  • Terms of trade

ASJC Scopus subject areas

  • Development
  • Economics and Econometrics

Cite this