The paper uses a small open economy general-equilibrium model to compare fiscal and nominal exchange rate devaluation … fiscal devaluation mimics nominal exchange rate adjustment and mitigates the output loss associated with demand rebalancing … tax shift from labour to consump-tion as standard example of fiscal devaluation remains moderate, however. …

preferably USD. This paper’s main focus is dollarization and currency devaluation; of which are yet unresolved both theoretically …