IMF finds formula for trade-shock recovery

Real exchange rate depreciation, along with improvements in government stability and the institutional environment can lead to a speedy recovery from terms-of-trade shocks, research published by the International Monetary Fund finds.

The research uses data from 159 countries taken from 1970 until 2006 to show a "fairly robust" relationship between the policy shifts and a fast recovery.

A timely increase in aid may also help.

To read the research, click here

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