In export oriented Economy, we often come across currency devaluation as means to boost exports. As per my understanding (please correct me if I am wrong), currency devaluation will immediately bring the prices of a countries export low, boosting sales and market share in foreign market, lets call this time T1. Initially the inflation will be lagging behind and after some time should rise and new equilibrium state should be achieved. The time at which equilibrium is reached i.e. inflation has countered the affects of devaluation, lets call it T2. My understanding is, longer the time gap between T2 and T1, larger would be the benefit to the export oriented economy. There would be multiple factors driving the time difference like inventory build, local demand etc, but longer inflation takes to pick up better for the exports and economy. Is my understanding correct?


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