This is a Ritchie level of economics

With the second loan, the IMF exerted sustained pressure on Tunisia, and more specifically on the Tunisian Central Bank, to stop intervening in the currency markets to defend the value of the Tunisian dinar. The result of the dinar’s (imposed) depreciation has been to increase imports at a time when the main exports (phosphates and tourism) are in crisis and cannot offset these new costs.

Why would imports increase with depreciation? Get more expensive, yes, which will reduce them…..

3 comments on “This is a Ritchie level of economics

  1. Or some kind of Giffen Good effect if they import basic staples and produce luxury items domestically?

    Probably more likely a typo though.

  2. In fairness, trying to read the context of the article, I think he does simply mean the price of imports (as you’ve corrected it, Tim)?

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