Aizenman, Joshua; Lee, Jaewoo - In: Pacific Economic Review 15 (2010) 3, pp. 324-335
This paper examines the degree to which the learning by doing (LBD) externality calls for an undervalued exchange rate. We obtain mixed results. For an economy where the LBD externality operates in the traded sector, real exchange rate undervaluation may be used to internalize this externality,...