Suchergebnisse

The purpose of the present note is to illustrate that although
our knowledge of the consequences of devaluation is too limited to
warrant reliable policy recommendations, it is well within the
competence of the economist to build simple models illuminating certain
aspects of the devaluation problem. We shall concentrate on only one
aspect, the increase in costs of production which results from a price
increase of imports. The question posed is: what increases in cost of
production will occur if Pakistan decides to devalue its currency by 50
per cent? It will be shown in the next section that, on certain
assumptions, this question can be solved easily with an input-output
model. In Section II some implications of our calculations will be
given. Finally, in Section III some conclusions will be
drawn.

The semi-input-output method, as presented by Tinbergen [1],
is designed solely for the evaluation of investment projects. It tells
us, given the criterion used, which sectors or industries should get
priority in a development plan. The method does not tell us to what
extent the production of an attractive industry should be increased. To
solve this problem we need a planning model. The main aim of the present
note is to show the possibility of formulating a planning model based on
the semi-input-output method. As such, the present paper should be
considered as an extension of the article by Tinbergen. Before coming to
our main subject however, I would like to make two comments on the paper
by Tinbergen [1].