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| Author: | Maneschi, A. |
| Title: | Project appraisal procedures and the evaluation of foreign exchange: a comment |
| Journal: | Economica
1990 : MAY, VOL. 57:226, p.263-269 |
| Index terms: | FOREIGN EXCHANGE PROJECT APPRAISAL EXCHANGE RATES BALANCE OF PAYMENTS WELFARE |
| Language: | eng |
| Abstract: | In contrary to Dinwiddy and Teal, who in 1986 analysed the shadow exchange rate /SER/ in a tariff-distorted, small economy containing two traded and one non-traded-good, the author maintains that a SER is inherent to the model even if the balance of payments constraints is "binding". It equals the value of the marginal consumption basket at market prices divided by its value at world or foreign exchange equivalent /FEE/ prices. Shadow prices defined in welfare terms equal the products of the SER and /i/ the world /or FEE/ prices of goods, or /ii/ marginal products of factors at world prices. |
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