Currency collapses lead to a permanent loss in output, ranging from 2% to 6% of GDP. The negative effects occur before the actual drop in currency value, indicating that the costs stem from factors leading to the collapse. Despite this, currency collapses tend to have a positive impact on output. In the year of a collapse, positive growth is twice as likely as contraction, with positive growth rates in the following years being common. The duration of the collapse also affects exchange rate and output dynamics.