THE EFFECTIVE EXCHANGE RATE, EMPLOYMENT, AND GROWTH IN A foreign exchange constrained economy,
Abstract
An analysis of how the effective exchange rate--the price of foreign exchange relative to domestic factor prices--influences the balance of payments constraint and, hence, Colombia's ability to achieve faster growth and higher employment. The conventional two-gap models lead to the pessimistic conclusion that Colombia cannot increase its growth rate without increases in foreign assistance and, therefore, that the level of the effective exchange rate is not of particular policy concern. A model is developed that admits the possibility of substituting domestic inputs for both intermediate and capital goods imports. (Author)
Document Details
- Document Type
- Technical Report
- Publication Date
- Nov 01, 1968
- Accession Number
- AD0678891
Entities
People
- Richard R. Nelson
Organizations
- RAND Corporation