Output effects of devaluation: Evidence from Asia

We study the effect of devaluation on output in six developing countries of Asia. In an empirical model that includes monetary, fiscal, and external v ariables, we examine the impact of devaluation as the effect of real exchan ge depreciation and alternatively as the effect of nominal devaluation and changes in the foreign-to-domestic price ratio. We find that with few excep tions a devaluation fails to make arty effect on output over any length of time - short run, intermediate run or long run. Whatever effect on output u te are able to uncover comes from the relative price level (the ratio of fo reign to domestic prices) but not from nominal devaluation.