Malawi's economy faces inflation and GDP growth trade-offs with devaluation.
The article presents a model of the Malawian economy, focusing on production, government, and prices. By running simulations, the researchers found that devaluing the Malawi kwacha can improve trade balance but increase inflation and reduce GDP growth. Increasing government spending can boost GDP growth but worsen trade balance. The model was also used to analyze short-term trends using a specific estimation technique.