This paper examines empirically one of the most popular views in international economics, yet barely tested: undervaluation of the currency is a "beggar-thy-neighbor" policy. It assesses simultaneously the two closely related implications of the beggar-thy-neighbor view: (i) undervaluation of...

Undervaluation of the currency is generally believed to affect growth through two main transmission channels: the "capital accumulation channel" and the "total factor productivity (TFP) growth channel". This paper carries out the first empirical investigation on the TFP growth channel. More...