scholarly journals Real Exchange Rates And U.S. Bilateral Trade

2011 ◽  
Vol 12 (4) ◽  
pp. 138 ◽  
Author(s):  
Abdulhamid Sukar ◽  
Taisier AlDaib Zoubi
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Bilateral Trade ◽  
Real Exchange Rates ◽  
Trade Deficit ◽  
Real Income ◽  
Trade Flows ◽  
Bilateral Trade Flows ◽  
The Relationship ◽  
The U.S

<span>The persistence of the U.S. trade deficit despite the significant depreciation of the dollar in the second half of the 1980s prompted several studies seeking an explanation for this phenomenon. There has been a renewed interest on the exchange rate trade linkage as the U.S. trade deficit reached a record high despite steady depreciation of the dollar in early 1995. This paper presents an empirical analysis of the relationship between real exchange rate and U.S. exports to Canada and Japan. The major finding of this paper is that real income and real exchange rates changes are important determinants of bilateral trade flows.</span>

Exchange-Rate Volatility and Industry Trade Between Japan and China

2012 ◽  
Vol 12 (3) ◽  
pp. 1850268 ◽  
Author(s):  
Mohsen Bahmani-Oskooee ◽  
Scott W. Hegerty ◽  
Jia Xu
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Exchange Rate Volatility ◽  
Trade Flows ◽  
Negative Effects ◽  
Exchange Rate Uncertainty ◽  
Long Run ◽  
Bilateral Trade Flows ◽  
Short Run ◽  
Export Industries

Exchange-rate risk is often thought to reduce international trade flows, but numerous theoretical and empirical analyses have pointed toward positive as well as negative effects. This is particularly true when bilateral trade flows for individual industries are estimated. In this study, we extend the literature to the case of Japanese trade with China for 110 import industries and 95 export industries. Aggregate Japanese exports, but not imports, respond to real exchange rate volatility in the long run, while most individual export and import industries respond in the short run. Although many individual Japanese import industries are affected in the long run by risk, mostly negatively, this is even more the case for exporters. A larger proportion of Japanese export industries are affected by exchange rate uncertainty for most industry sectors. Manufacturing exports are particularly vulnerable to this risk, with a large share responding negatively to increased volatility.

scholarly journals The Value-Added Effects of Exchange Rates on Global Trade

2021 ◽  
Vol 10 (1) ◽  
pp. 184
Author(s):  
Myoung Shik Choi ◽  
Hun Dae Lee
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Value Added ◽  
Trade Flows ◽  
Intermediate Goods ◽  
Negative Effects ◽  
Policy Objective ◽  
Positive Effects ◽  
The Us ◽  
Bilateral Trade Flows

This study is an investigation of view about the gross, bilateral, and value-added trades adjusting to exchange rate and income within global value chains. Various difference between aggregate and value-added trade flows is introduced. We adopt the traditional trade models and test them using time-series analysis on value-added exports and imports. We find that currency depreciation has negative effects on gross exports in the US and Korea due to intermediate goods imports, but positive effects on value-added exports in Japan and Korea. On the other hand, currency appreciation has negative effects on gross imports in the US, China, Japan and Korea due to intermediate goods exports, but positive effects on value-added imports in Japan. All income effects are positive as we expect. Also, we find the similar effects of exchange rate on bilateral trade flows. On the whole, depreciation has negative effects on gross exports but positive effects on value-added exports while appreciation has negative effects on gross imports but positive effects on value-added imports. With this study, the main contribution is further evidence on the value-added trade analysis. Practical implications reducing uncertainty could be an important policy objective to achieve higher growth.   Received: 23 October 2020 / Accepted: 16 December 2020 / Published: 17 January 2021

scholarly journals Exchange rate regimes in the major Latin American countries since the 1950s: lessons from history

2012 ◽  
Vol 30 (1) ◽  
pp. 157-188 ◽  
Author(s):  
Roberto Frenkel ◽  
Martín Rapetti
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Latin American ◽  
Exchange Rate Regimes ◽  
Real Exchange Rates ◽  
Macroeconomic Performance ◽  
The 1950S ◽  
Nominal Anchor ◽  
The Relationship ◽  
Latin American Countries

AbstractThe paper analyses exchange rate regimes implemented by the major Latin American (LA) countries since the 1950s, with special attention to the period beginning in the 1970s. The aim is to evaluate the relationship between exchange rate regimes and macroeconomic performance. After an overview of the main trends followed by the major LA countries over the last 60 years, the paper focusses on regimes that were implemented (1) with stabilisation purposes (nominal anchor) and (2) with the aim of targeting competitive and stable real exchange rates. These sections analyse in greater detail some important links between exchange rate regimes and macroeconomic performance. The paper closes with an assessment of the experiences with exchange rate regimes in LA.

Exploring real exchange rate effects on trade balances in Thailand

2002 ◽  
Vol 28 (11) ◽  
pp. 16-27 ◽  
Author(s):  
Tantatape Brahmasrene ◽  
Komain Jiranyakul
Keyword(s):  
Exchange Rate ◽  
Exchange Rates ◽  
Real Exchange Rate ◽  
Foreign Currency ◽  
Bilateral Trade ◽  
Real Exchange Rates ◽  
The Real ◽  
Cointegration Tests ◽  
Non Linear ◽  
The Impact

This study investigates the impact of real exchange rates on the trade balances between Thailand and its major trading partners. Previous empirical evidence gave mixed results of the impact of real exchange rates on trade balances. In this study, Augmented Dicky‐Fuller and Phillips‐Perron tests for stationarity followed by the cointegration tests are implemented. All variables in the model are nonstationary but cointegrated. In cointegrating regressions, biases are introduced by simultaneity and serial correlation in the error. The specification that deals with these problems is the non‐linear specification of Stock and Watson (1989). By using this non‐linear model as modified by Reinhart (1995), the results show that the impact of real exchange rates (Thai baht/foreign currency) on trade balances is significant in most cases. Therefore, the generalized Marshall‐Lerner condition seems to hold. Furthermore, the results show that the real exchange rates play a more important role in the determination of the bilateral trade balances than other factors. Since the real exchange rate variable plays a major role in this study, the policy recommendation is to prevent exchange rate misalignment. A policy that can neutralize the changes in nominal exchange rates and relative prices should be introduced to prevent further deterioration of the trade balance.

scholarly journals On PTAs and Bilateral Trade: Is GVC Trade Sensitive to the Breadth of Trade Policy Cooperation?

Economies ◽  
2020 ◽  
Vol 8 (4) ◽  
pp. 84
Author(s):  
Michele Delera ◽  
Neil Foster-McGregor
Keyword(s):  
Trade Policy ◽  
Value Chain ◽  
Bilateral Trade ◽  
Developing Economies ◽  
Trade Flows ◽  
Global Value Chain ◽  
Bilateral Trade Flows ◽  
Different Dimensions ◽  
Using Data ◽  
The Relationship

We study the relationship between the scope of trade policy cooperation and bilateral trade flows with a particular focus on global value chain (GVC) trade using data on the core and non-core provisions included in preferential trade agreements (PTAs). We find that broader PTAs have a larger impact on trade flows involving intermediates relative to flows involving all products, suggesting that GVC trade is particularly sensitive to the scope of trade policy cooperation. We also investigate different dimensions of heterogeneity in PTAs. We find that core provisions tend to drive the effect of PTAs on the level of GVC trade and that PTAs are particularly effective in raising the level of GVC trade between developing economies. We explore these issues using a sample of 189 countries over the period 1990–2015, with data obtained from the latest release of the EORA multi-regional input–output tables and UN-COMTRADE data.

Exchange rate movements, export sophistication and direction of trade: the development channel and North–South trade flows

2019 ◽  
Vol 43 (6) ◽  
pp. 1623-1652
Author(s):  
Mustafa Caglayan ◽  
Firat Demir
Keyword(s):  
Exchange Rate ◽  
Bilateral Trade ◽  
Trade Flows ◽  
Product Categories ◽  
Exchange Rate Movements ◽  
Bilateral Trade Flows ◽  
Primary Goods ◽  
Development Literature ◽  
The Empirical Analysis ◽  
High Skill

Abstract We study the effects of real exchange rate (RER) changes on trade flows considering the skill content and origin/destination of products in a North–South framework. The empirical analysis is based on bilateral trade flows in five product categories of technology-and-skill intensities between 172 countries during 1962–2012. Consistent with the development channel, we find that both the composition and direction of trade affect how exports respond to RER changes. We find that high-skill manufactures and primary goods are the least affected from RER depreciation and volatility. The strongest effects are found for medium-skill, low-skill and resource-intensive manufactures. We also show that these effects depend on the direction of trade. Southern exports are more sensitive to RER than Northern exports in all product categories except for primary goods. Regarding volatility, South–North exports are hurt the most while North–South the least. Also, South–South exports appear to be less sensitive to volatility in all product groups than South–North. Overall, this paper provides a synthesis of the recent neoclassical international trade literature with the heterodox development literature.

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