Can real exchange rate devaluation improve the trade balance? The 1990-1998 Brazilian case

Fábio Augusto Reis Gomes, Lourenço Senne Paz

Research output: Contribution to journalArticle

24 Scopus citations

Abstract

The Brazilian Trade Balance deficit in the 1990s was blamed on the adopted crawling-peg exchange rate regime in which the real exchange rate was supposedly appreciated. The purpose in this letter is to assess this relationship by using VEC-M model to check if Marshall - Lerner condition and J-curve phenomenon hold. The results indicate that the Marshall - Lerner condition holds and the J-curve would be present in the aftermath of a real exchange rate devaluation.

Original languageEnglish (US)
Pages (from-to)525-528
Number of pages4
JournalApplied Economics Letters
Volume12
Issue number9
DOIs
StatePublished - Jul 15 2005

ASJC Scopus subject areas

  • Economics and Econometrics

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