Do Self‐fulfilling Expectations of Currency Devaluation Improve the Balance of Payments?

Abstract

Analyses how the status of balance of payments follows se\ill\ fulfilling expectations of currency devaluation. It is found that before a currency devaluation, whether the economy w\ill\ experience a balance‐of‐payments surplus or deficit crucial depends on the degree of capital mobility.

Citation

Lai, C. and Chang, W. (1992), "Do Self‐fulfilling Expectations of Currency Devaluation Improve the Balance of Payments?", Journal of Economic Studies, Vol. 19 No. 4. https://doi.org/10.1108/01443589210021424