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The Distributional Consequences of Large Devaluations
| Content Provider | Scilit |
|---|---|
| Author | Cravino, Javier Levchenko, Andrei A. |
| Copyright Year | 2016 |
| Description | Journal: SSRN Electronic Journal We study the differential impact of large exchange rate devaluations on the cost of living at different points on the income distribution. Across product categories, the poor have relatively high expenditure shares in tradeable products. Within tradeable product categories, the poor consume lower-priced varieties. Changes in the relative price of tradeables and the relative prices of lower-priced varieties following a devaluation will affect the cost of the consumption basket of the low-income households relative that of the high-income households. We quantify these effects following the 1994 Mexican peso devaluation and show that their distributional consequences can be large. In the two years that follow the devaluation, the cost of the consumption basket of those in the bottom decile of the income distribution rose between 1.46 and 1.6 times more than the cost of the consumption basket for the top income decile. |
| Related Links | http://www.nber.org/papers/w23409.pdf https://papers.ssrn.com/sol3/Delivery.cfm?abstractid=2786971 |
| ISSN | 10914358 |
| e-ISSN | 15565068 |
| DOI | 10.2139/ssrn.2786971 |
| Journal | SSRN Electronic Journal |
| Language | English |
| Publisher | Elsevier BV |
| Publisher Date | 2016-02-01 |
| Access Restriction | Open |
| Subject Keyword | Journal: SSRN Electronic Journal Industrial Relations Exchange Rates Large Devaluations Distributional Effects Consumption Baskets |
| Content Type | Text |
| Resource Type | Article |
| Subject | Public Health, Environmental and Occupational Health Psychiatry and Mental Health |
