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how can devaluation of a nation's currency lead to increase in government expenditure, hence facilitating economic growth.

I was reading through a textbook and saw that the devaluation of a nation's currency can lead to increase in government expenditure, hence facilitating economic growth.... But it wasn't really explained. How is this possible please? I need an economist perspective. I'm an accountant.

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  • $\begingroup$ What was the exchange rate regime? That is very important information to answer your question. $\endgroup$ – BB King Oct 6 '15 at 10:14
  • $\begingroup$ It is Floating type $\endgroup$ – user274246 Oct 6 '15 at 10:17
  • $\begingroup$ Floating exchange rates $\endgroup$ – user274246 Oct 6 '15 at 10:22
  • $\begingroup$ Is it something to do with making it easier for foreign entities to finance the government's debt @BBKing? $\endgroup$ – msouth Oct 6 '15 at 14:03
  • $\begingroup$ With a fixed exchange rate regime the government might have to react in some way to maintain the exchange rate possibly. Even then it would be a bit farfetched though. With a float, its even harder to make the case that government expenditure should increase. Maybe there are some other details that explain the statement, but there is surely not a standard link here between government expenditure and exchange rates per se. $\endgroup$ – BB King Oct 6 '15 at 15:11

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