The Traderszone Network

Published in TZ Latest News 13 March, 2015 by The TZ Newswire Staff

Apart from boosting NGDP and RGDP, euro depreciation will not help Italy

That’s the conclusion of a new paper that Tyler Cowen has linked to.  And I think that’s right.  Many stimulus advocates (including me and Lars Svensson) have pointed out that currency depreciation caused by monetary stimulus would not be expected to boost net exports, as the substitution effect will often be dominated by the income effect (a booming economy sucking in more imports.)

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