Economy, asked by TANSEER7244, 1 year ago

Why the devaluation is unsuccessful in developing countries

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Answered by SuperstarPiyush

AD increases causing demand pull inflation. Firms / exporters have less incentive to cut costs because they can rely on the devaluation to improve competitiveness. The concern is in the long-term devaluationmay lead to lower productivity because of the decline in incentives.

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