Foreign Exchange Controls in a Black Market Economy*
نویسنده
چکیده
An investigation of the impact of foreign exchange controls in a black market economy is undertaken within the context of a choice-theoretic cash-in-advance general equilibrium model. While such controls may improve a 'distortion-free' economy's trade balance and balance of payments they are found to increase the domestic price of imports and lower the country's welfare. The ramifications of black market for economic welfare turn out to be ambiguous, depending crucially on the government's reaction to the leakage of foreign exchange into the economy via illegal activity.
منابع مشابه
Decline of the Iranian Rial and Its Macroeconomic Consequences
Since the advent of Islamic Revolution in 1979 and due to foreign exchange controls by the Central Bank of Iran, the black market value of the Iranian rial had declined substantially as compared to its official value. In several articles published in professional journals I have first identified factors which has caused the rial to decline. I have then investigated the impact on Iranian economy...
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