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ИД «Финансы и кредит»






Economic Analysis: Theory and Practice

The Impact of Devaluation on the Country's Macroeconomic Performance

Vol. 16, Iss. 9, SEPTEMBER 2017

PDF  Article PDF Version

Received: 26 June 2017

Received in revised form: 11 August 2017

Accepted: 18 August 2017

Available online: 29 September 2017


JEL Classification: Е24, Е27, Е39, Е52, Е65

Pages: 1708–1738


Berdinazarov Z.U. Institute of Forecasting and Macroeconomic Research, Tashkent, Uzbekistan

Importance The article analyzes the influence of devaluation on macroeconomic indicators of the Republic of Uzbekistan over the last 20 years of its economic development.
Objectives The main goal of this study is to improve the methodological framework for applying the devaluation tool and its impact on macroeconomic indicators.
Methods The methodology draws on the analysis of the impact of devaluation on the country's macroeconomic indicators. The analysis employs a number of statistical methods, like grouping, comparison, arithmetic mean calculation (variance, standard deviation, coefficient of variation, etc.), and the Marshall–Lerner condition to determine the elasticity of exports and imports. The analysis includes long-term (five-year) and short-term (annual) lags.
Results Based on the findings, I offer a new approach to determine the level of devaluation of the national currency and its mid-term forecast parameters (2017–2021).
Conclusions and Relevance The continuously-progressive practical approach to devaluation policy implementation should be replaced by the intermittent-regressive one. This method covers all components of structural methodologies that provide the interrelation for the national currency devaluation. In other words, the method of devaluation should be based on the whole picture of phenomena and processes of actions.

Keywords: devaluation, elasticity, export, import, real effective exchange rate


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