The Myth of Competitive Devaluations in the 1930s
(2020) In Lund Papers in Economic History. General Issues- Abstract
- Conventional wisdom pretends that currency devaluations contributed to the Great Depression of the 1930s. This paper examines the impact of nominal exchange rates on foreign trade of 14 industrialized countries 1929-1939. If the idea of competitive devaluation holds, one should expect an increase in exports, along with a decline in imports, to trading partners against which the exchange rate depreciated. Tests show that the beggar-thy-neighbour effects of exchange rate adjustments were at most marginal. Moreover, there is evidence that currency depreciations were expansionary not only for countries that devalued but for the international economy as a whole.
Please use this url to cite or link to this publication:
https://lup.lub.lu.se/record/589574f0-72e3-4545-871d-e42798dbe523
- author
- Ljungberg, Jonas LU
- organization
- publishing date
- 2020
- type
- Working paper/Preprint
- publication status
- published
- subject
- keywords
- interwar, Europe, exchange rates, trade, depression, N14, F31, E31, E52
- in
- Lund Papers in Economic History. General Issues
- issue
- 2020:211
- pages
- 36 pages
- language
- English
- LU publication?
- yes
- id
- 589574f0-72e3-4545-871d-e42798dbe523
- date added to LUP
- 2020-03-06 09:46:01
- date last changed
- 2020-03-06 09:46:01
@misc{589574f0-72e3-4545-871d-e42798dbe523, abstract = {{Conventional wisdom pretends that currency devaluations contributed to the Great Depression of the 1930s. This paper examines the impact of nominal exchange rates on foreign trade of 14 industrialized countries 1929-1939. If the idea of competitive devaluation holds, one should expect an increase in exports, along with a decline in imports, to trading partners against which the exchange rate depreciated. Tests show that the beggar-thy-neighbour effects of exchange rate adjustments were at most marginal. Moreover, there is evidence that currency depreciations were expansionary not only for countries that devalued but for the international economy as a whole.}}, author = {{Ljungberg, Jonas}}, keywords = {{interwar; Europe; exchange rates; trade; depression; N14; F31; E31; E52}}, language = {{eng}}, note = {{Working Paper}}, number = {{2020:211}}, series = {{Lund Papers in Economic History. General Issues}}, title = {{The Myth of Competitive Devaluations in the 1930s}}, url = {{https://lup.lub.lu.se/search/files/76928544/LUPEH_211.pdf}}, year = {{2020}}, }