ABSTRACT
As noted earlier, devaluations are unpopular; the restrictive fiscal and monetary policies that must accompany such parity changes are only part of the reason for this public response. Devaluations produce across the economy a range of disruptive side-effects that add to this reaction. First, the prices of a wide range of imports and exportables rise, lowering the real incomes of domestic residents who purchase them. In an open economy, this decline in real incomes can be sizable.
