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The Myth of Competitive Devaluations in the 1930s

Ljungberg, Jonas LU orcid (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:
author
organization
publishing date
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}},
}