Seycehelles

This paper studies likely macroeconomic impacts and social consequences of devaluation of the Seychelles rupee. Analyzing potential welfare impacts of devaluation ex ante is crucial for policy making, since information obtained from such analyses would allow policy makers to design cost-effective, well-targeted policy measures, with the aim of mitigating negative social consequences of devaluation. Based on the estimated welfare impact of devaluation, the paper considers mitigation policy options, and discusses their effectiveness and associated budgetary costs. The focus of this study is the likely impacts of devaluation on the prices, economy and social welfare. The reminder of the paper is structured as follows. Section two first analyzes Seychelles’ household expenditure survey data and presents the incidence of poverty and inequality in Seychelles. Section three then discusses how the Seychelles economy would adjust to an initial devaluation of the US dollar value of the rupee by 45 percent, followed by a gradual move to an equilibrium level. Projected macroeconomic variables and prices are applied to the household survey data to estimate possible impacts on the incidence of poverty. Section four discusses a variety of policy measures designed to alleviate the adverse impacts on the poor. Fiscal viability of these measures is also discussed in this section. Section five concludes the paper.

Bibliographic Details

Main Authors:	Kojo, Naoko C., Ivaschenko, Oleksiy
Format:	Working Paper biblioteca
Language:	English en_US
Published:	World Bank, Washington, DC 2006-02
Subjects:	TARIFFS, TOTAL REVENUE, DURABLE GOODS, FOREIGN CAPITAL, WORLD TRADE ORGANIZATION, PRODUCTION, ADVERSE IMPACTS, STOCK, FISCAL DEFICITS, INCOME, INTEREST, EXPECTATIONS, REAL GDP, EXCHANGE, BALANCE OF PAYMENTS, MACROECONOMIC POLICY, CONSUMER GOODS, GDP PER CAPITA, LIQUIDITY, DEVELOPING COUNTRIES, EXPORTS, WELFARE SYSTEM, TAX COLLECTION, REPAYMENTS, BLACK MARKET, ECONOMIC STRUCTURE, FISCAL POLICY, WELFARE, DEVALUATION, EQUILIBRIUM, VARIABLES, TAX, REAL INCOME, INPUTS, PAYMENTS, WEALTH, INFORMATION SYSTEMS, CREDITORS, INFLATION, PENSION, SAFETY NETS, BUDGET, CONVERSION, LABOR MARKET, INFLUENCE, TRADE BALANCE, OIL PRICES, DERIVATIVES, DEMAND FOR MONEY, CURRENCY, EXPORT GROWTH, CONTRACTS, INFLATIONARY PRESSURES, FINANCES, MACROECONOMIC MODELS, EXCHANGE RATES, OPTIONS, MONOPOLY, EQUIPMENTS, DEBT, INFLATIONARY PRESSURE, HOUSEHOLD INCOME, RETURN, DEFICITS, INFLATION RATE, CONSUMPTION EXPENDITURE, EXCESS LIQUIDITY, INTERNATIONAL ECONOMICS, DOMESTIC DEBT, LOANS, DIRECT INVESTMENT, RESERVES, UTILITY, HOUSEHOLD WEALTH, FOREIGN CURRENCY, PRODUCTION INPUTS, BANK POLICY, PUBLIC INVESTMENT, EXPENDITURE, EQUILIBRIUM ANALYSIS, UNEMPLOYMENT, DEREGULATION, CONSUMPTION, BUDGET CONSTRAINT, INCOME SECURITY, CAPITAL OUTLAYS, GOOD, WAGES, COUPONS, FINANCIAL CRISIS, FOREIGN FINANCING, FUTURE, VALUE, PENSIONS, WAGE RATES, COMPETITIVENESS, FOREIGN DIRECT INVESTMENT, RETURNS, CREDIT, MACROECONOMICS, PURCHASING POWER, DEMAND, GOVERNMENT EXPENDITURE, UTILITY FUNCTION, INVESTMENT PROJECTS, AGGREGATE DEMAND, PRICE CHANGES, ECONOMY, CONSUMERS, EXCESS DEMAND, EXPENDITURES, PROPERTY, CURRENCY DEVALUATION, TAX RATES, REAL EXCHANGE RATE, MARKET, DEFAULT, BENCHMARK, FOREIGN EXCHANGE, TRADE LIBERALIZATION, INCOME EFFECT, PRODUCTION FUNCTION, BALANCE OF PAYMENT, TREASURY, MACROECONOMIC VARIABLES, HOLDINGS, GOVERNMENT DEBT, GOVERNMENT POLICIES, PARTIAL EQUILIBRIUM ANALYSIS, MACROECONOMIC SHOCKS, ECONOMIC DEVELOPMENT, TRADE, MACROECONOMIC VARIABLE, GDP, GOODS, GENERAL EQUILIBRIUM ANALYSIS, GLOBAL TRADE, SECURITY, TRANSFER PAYMENTS, DURABLE, GROWTH RATE, SUBSTITUTION EFFECT, INVESTMENT, PRICE CEILINGS, BOND, SHARE, PUBLIC FINANCES, POVERTY, ADVERSE IMPACT, FOREIGN INTEREST, ADVERSE EFFECT, CAPITAL INFLOWS, GINI COEFFICIENT, REVENUE, PROFIT, PUBLIC SECTOR DEBT, MACROECONOMIC POLICIES, EXCHANGE RATE, INSTRUMENT, REMITTANCES, PUBLIC SPENDING, PRICE CONTROLS, ARREARS, CAPITAL FLIGHT, ADVERSE EFFECTS, PRICES, EXTERNAL BORROWING, DEVELOPMENT POLICY,
Online Access:	http://documents.worldbank.org/curated/en/2015/07/24788385/welfare-impacts-exchange-rate-adjustment-policy-options https://hdl.handle.net/10986/22423
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