Abstract
Chapter 5 analyzes the impact of exchange rate depreciation on output growth in the island. The results indicate that 1 percent depreciation of the domestic currency in one year leads to a potential loss of 0.3 percent to GDP growth in the year that follows. Over the 33-year period, total potential losses to GDP growth amounted to little less than US $4.5 billion. The findings suggest that pursuing policies to stabilize the exchange rate can lead to favourable growth in GDP through a variety of channels.
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Haughton, A. (2017). Currency Depreciation and Economic Growth. In: Developing Sustainable Balance of Payments in Small Countries. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-319-53031-4_5
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DOI: https://doi.org/10.1007/978-3-319-53031-4_5
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