The article uses a small open economy version of the macroeconomic general-equilibrium model QUEST to compare fiscal and nominal exchange rate (EXR) devaluation with respect to their impact on economic activity and the current account. In particular, the article investigates quantitatively to...

The paper uses a small open economy general-equilibrium model to compare fiscal and nominal exchange rate devaluation with respect to their impact on economic activity and the current account. In particular, it investigates to which extent fiscal devaluation mimics nominal exchange rate...