Industrialisation as a structural determinant of inflation performance in IMF stabilisation programmes in less developed countries

Kirkpatrick, Colin; Önіş, Zіya

doi:10.1080/00220388508421947

Cited by 5 publications

(1 citation statement)

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“…For monetarists, the contractionary implications arise because small open developing economies face world determined prices, so that devaluation reduces the real money stock. Structuralist commentators have maintained that nominal devaluations tend to be translated into higher domestic in¯ation since both imports and exports have a low price elasticity (Kirkpatrick, 1985). The consequent domestic demand de¯ation is further aggravated by the eect on income distribution, whereby in the face of sticky domestic wages, devaluation tends to redistribute toward richer groups who have a higher propensity to save and import Pastor (1987), Mosley et al (1991), Shapiro (1984), Gordon and Parker (1984).…”

Section: Introductionmentioning

confidence: 95%

Revisiting the exchange rate debate: the Jamaican experience

Atkins

2000

J. Int. Dev.

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This paper examines the impact of exchange rate devaluation in an open island economy. By taking account of the non-stationarity of the variables, and identifying the consequent cointegrating relation, the long-run and short-run impacts are identi®ed. The results suggest a signi®cant and negative long-run elasticity of output in response to a devaluation of the real exchange rate. The short-run dynamics indicate that the real exchange rate makes fairly rapid adjustment when there is deviation from the long-run equilibrium relation. Such rapid response to any demand side shocks suggest that the Jamaican economy may be susceptible to Dutch Disease eects.

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Section: Introductionmentioning

confidence: 95%