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Trade Policy and Economic Welfare$
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W. Max. Corden

Print publication date: 1997

Print ISBN-13: 9780198775348

Published to Oxford Scholarship Online: November 2003

DOI: 10.1093/0198775342.001.0001

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The Exchange Rate, Trade Policy, and the Current Account

The Exchange Rate, Trade Policy, and the Current Account

Chapter:
(p.262) 15 The Exchange Rate, Trade Policy, and the Current Account
Source:
Trade Policy and Economic Welfare
Author(s):

W. Max Corden (Contributor Webpage)

Publisher:
Oxford University Press
DOI:10.1093/0198775342.003.0015

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

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