Currency Devaluation: Exports > Imports

Currency devaluation means a reduced value of currency with respect to foreign currencies and its reduced purchasing power to foreign goods, which result from monetary policy. In a small open economy, as such the assumptions of the Mundell-Fleming model, currency devaluation can result from expansionary monetary policy, referring to the lower exchange rate instead of … Continue reading Currency Devaluation: Exports > Imports

Currency Devaluation

Currency devaluation is a form of monetary policy in which it reduces the value of a currency with respect to those goods, services or other monetary units that the currency can be exchanged with. Currency devaluation can only be part of a hampered market with a central bank, “[since] the Bretton Woods system the US … Continue reading Currency Devaluation

Interest Rates Are A Market Price Signal Not To Be Interfered With

An interfering government is the only barrier to any revival of a capitalist society. In a free market, market price signals communicate and reveal the subjective valuations of all market participants, including time preference toward present goods over future goods. Market price signals represent scarcity and important information, such as market interest rates, and are … Continue reading Interest Rates Are A Market Price Signal Not To Be Interfered With