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Actually, a weaker currency leads to a stronger economy through more exports and greater tourist income. It only hurts if you owe foreign currenty, and are unwi
by MaysonL 15y ago
Actually, a weaker currency leads to a stronger economy through more exports and greater tourist income. It only hurts if you owe foreign currenty, and are unwilling to default on those debts. See Argentina after going off the dollar peg, and Iceland after its banks collapsed.
- Robelius 15y agoBut it is the psychological effect of having a strong currency being substituted with a weaker currency that will lessen consumption. Economics is more of the psychology of the consumer than anything else, at least in my opinion.