Chapter

The Exchange Rate, Trade Policy, and the Current Account

W. Max Corden

in Trade Policy and Economic Welfare

Second edition

Published in print February 1997 | ISBN: 9780198775348
Published online November 2003 | e-ISBN: 9780191715471 | DOI: http://dx.doi.org/10.1093/0198775342.003.0015
 The Exchange Rate, Trade Policy, and the Current Account

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A simple model that shows the relationship between the real exchange rate and tariffs is presented. In general, unilateral trade liberalization requires depreciation. The concepts of exchange rate protection and of the real appreciation problem is introduced, as well as the role of protection when the exchange rate is fixed.

Keywords: depreciation; exchange rate; real appreciation; tariffs; trade liberalization

Chapter.  7706 words.  Illustrated.

Subjects: International Economics

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