Beggar-Thy-Neighbor

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DEFINITION of 'Beggar-Thy-Neighbor'

An international trading policy that utilizes currency devaluations and protective barriers to alleviate a nation's economic difficulties at the expense of other countries. While the policy may help repair an economic hardship in the nation, it will harm the country's trading partners, worsening its economic status.

INVESTOPEDIA EXPLAINS'Beggar-Thy-Neighbor'

The policy name is derived from its resulting impact, making a beggar out of neighboring nations. The goal of a Beggar-Thy-Neighbor strategy is to increase the demand for your nation's exports, while reducing your reliance on imports. This is often executed by devaluing the nation's currency, which will make exports to other nations cheaper.

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RELATED FAQS
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    There is no question the composition of a country's balance of payments is more important than its balance of trade. This ... Read Full Answer >>
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