Learning by devaluating: A supply-side effect of competitive devaluation

► The paper analyses the consequences of learning by doing (LBD) in open economies. ► LDB implies that a country can increase its skill level by competitive devaluation. ► LDB substantially increases incentives to implement competitive devaluation. ► LBD increases the harmful effect of competitive devaluation on foreign output. ► LBD has qualitative consequences for the welfare effects of monetary policy.