Does Currency Devaluation Really Improve the Export Sector?
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It is a near-unquestioned assumption of mainstream economic thought, that if a currency is devalued, the country suffering from the devaluation sees some benefits - namely that the export sector will see an improvement. Why? It is said that this happens because exports become cheaper to nations dealing in foreign currencies, and imports become dearer, making the purchase of goods from abroad for a country's citizens more expensive.
Does Currency Devaluation Really Improve the Export Sector?
Does Currency Devaluation Really Improve the…
Does Currency Devaluation Really Improve the Export Sector?
It is a near-unquestioned assumption of mainstream economic thought, that if a currency is devalued, the country suffering from the devaluation sees some benefits - namely that the export sector will see an improvement. Why? It is said that this happens because exports become cheaper to nations dealing in foreign currencies, and imports become dearer, making the purchase of goods from abroad for a country's citizens more expensive.