• Large currency devaluations have a decidedly bad name, …
• because they tend to be associated with chaos and disruption, …
• even as the “dominant currency paradigm” clouds the lift to exports.
• With EM currencies under continued pressure since COVID began in 2020, …
• we update our earlier work on large devaluations and their impact on exports.
• We survey all real and sustained devaluations in excess of 20 percent since 1980.
• On average, export volumes receive a substantial boost across these episodes, …
• while import volumes fall sharply early on, helping rebalance the current account.
• As EM struggles to boost growth, currency devaluations are part of the solution.