Competitive Exchange Rate and Public Infrastructure in a Macrodynamic of Economic Growth

No 2015_20, Working Papers, Department of Economics from University of São Paulo (FEA-USP)

Abstract: We develop a dual open-economy model which incorporates a flow of public infrastructure as a factor of production to investigate effects of a competitive exchange rate policy under different levels of provision of public infrastructure. It is suggested that an exchange rate policy coordinated with a public infrastructure policy should produce better results. By increasing productivity in the tradable sector and by reducing inflationary pressures, this supply-side public policy contributes to the success of an economic growth strategy led by a competitive currency.

Keywords: Exchange rate policy; public infrastructure; economic development. (search for similar items in EconPapers)
JEL-codes: H54 O24 O41 (search for similar items in EconPapers)
Date: 2015-08-28, Revised 2016-04-05
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Journal Article: Competitive Exchange Rate and Public Infrastructure in a Macrodynamic of Economic Growth (2017)
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