Author : Mr.Giovanni Dell'Ariccia
Release : 1998-08-01
Genre : Business & Economics
Kind : eBook
Book Rating : 959/5 ( reviews)
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Book Synopsis Exchange Rate Fluctuations and Trade Flows by : Mr.Giovanni Dell'Ariccia
Download or read book Exchange Rate Fluctuations and Trade Flows written by Mr.Giovanni Dell'Ariccia. This book was released on 1998-08-01. Available in PDF, EPUB and Kindle. Book excerpt: This paper analyzes the effects of exchange rate volatility on bilateral trade flows. Through use of a gravity model and panel data from western Europe, exchange rate uncertainty is found to have a negative effect on international trade. The results seem to be robust with respect to the particular measures representing exchange rate uncertainty. Particular attention is reserved for problems of simultaneous causality. The negative correlation between trade and bilateral volatility remains significant after controlling for the simultaneity bias. However, a Hausman test rejects the hypothesis of the absence of simultaneous causality.