TY  - BOOK
AU  - Bergin,Paul
ED  - National Bureau of Economic Research.
TI  - Currency Undervaluation and Comparative Advantage
T2  - NBER working paper series
PY  - 2022///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - January 2022; Hardcopy version available to institutional subscribers
N2  - This paper highlights a tradeoff implied by a policy of export-led growth through currency undervaluation. While undervaluation can foster domestic manufacturing in countries like China by sustaining trade surplus, it also can harm a country's comparative advantage by altering the composition of exports. Undervaluation may discourage specializing in high-value added manufacturing and instead favor specialization in non-differentiated goods with higher price elasticity. A dynamic general equilibrium model of two traded good sectors and capital account restrictions shows that undervaluation can either raise or lower welfare depending on two competing effects on comparative advantage: agglomeration versus an elasticity effect
UR  - https://www.nber.org/papers/w29699
UR  - http://dx.doi.org/10.3386/w29699
ER  -