Exchange Rates and Trade: A Disconnect?
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Summary:
We examine the stability and strength of the relationship between exchange rates and trade over time using three alternative approaches, mitigating the endogeneity of the relation. We find that both exchange rate pass-through and the price elasticity of trade volumes are largely stable over time. Economic slack and financial conditions affect the relationship, but there is limited evidence that participation in global value chains has significantly changed the exchange rate–trade relationship over time.
Series:
Working Paper No. 2017/058
Subject:
Depreciation Exchange rate pass-through Exchange rates Export prices Exports Foreign exchange International trade National accounts Prices
English
Publication Date:
March 15, 2017
ISBN/ISSN:
9781475587494/1018-5941
Stock No:
WPIEA2017058
Pages:
52
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