Unilateral euroization by developing economies is underexplored even in comparison to unilateral dollarization (taken to mean the adoption of the US dollar as legal tender). This paper attempts to help fill this gap in the literature by investigating the case of Montenegro, which is one of the...

This paper surveys the theoretical and empirical literature on the effects of the real exchange rate (RER) on international trade, economic development and growth. We summarize the main conceptual issues, discuss the relevance of the RER as an instrument of development policy, provide an...

This paper analyzes a stylized small open economy that consists of two tradable output-producing sectors: a manufacturing sector and a (mainly tourism-related) services sector. Assuming sectoral differences based on stylized facts, we explore the impact of higher labor standards in the...

Environmental literature has largely neglected macroeconomic considerations, especially open economy ones. This paper develops a small country framework that seeks to address these issues. Medium- and long-run aspects are explored using standard trade and portfolio balance models, modified to...

This paper surveys the theoretical and empirical literature on the effects of the real exchange rate (RER) on international trade, economic development and growth. We summarize the main conceptual issues, discuss the relevance of the RER as an instrument of development policy, provide an...

Employing propensity score reweighting and event-based strategies, we provide evidence that sustained real exchange rate (RER) misalignments have significant effects on economic development: positive on GDP per capita and capital stock in the case of undervaluation, and negative on the capital...