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-increasing skill level, at the expense of the neighbor, by competitive devaluation engineered through low interest rates. If measured … by the cumulative change in output after 12 quarters, LBD increases the harmful effect of competitive devaluation on … devaluation increases both domestic output and welfare, at the expense of foreign output and welfare …
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This paper studies monetary and exchange rate policy in a world of global value chains. Using recent microdata from Japan and Russia, devaluations are shown to negatively affect exporters in terms of employment, domestic revenue and profitability relative to nonexporting firms. Given their...
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