Cover A New Look at Exchange Rate Volatility and Trade Flows
A New Look at Exchange Rate Volatility and Trade Flows
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Abstract

The effect of exchange rate volatility on trade flows was examined by a 1984 IMF study on G-7 countries. Over the past two decades, many developments in the world economy, such as the currency crises in the 1990s and increasing cross-border capital flows, may have exacerbated exchange rate volatility, while others, such as a deepening of the market in foreign exchange hedging instruments, may have reduced the impact of volatility on trade flows. Using recent advances in the economic theories on trade and in statistical methodologies, this paper revisits this important issue by taking into account these new developments and examining their effects on developing and transition economies, as well as on developed countries.

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Author:
Mr. Peter B. Clark
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Shang-Jin Wei https://isni.org/isni/0000000404811396 International Monetary Fund

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Ms. Natalia T. Tamirisa
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Mr. Azim M Sadikov
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Mr. Li Zeng
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Series:
Occasional Papers
Publisher:
International Monetary Fund
Language:
English
Publication Date:
30 Sep 2004
DOI:
https://doi.org/10.5089/9781589063587.084
ISBN:
9781589063587
ISSN:
0251-6365
Pages:
63
Keywords:
OP; exchange rate volatility; exchange rate; trade; country; nominal exchange rate; exchange rate fluctuation; exchange rate variability; volatility measure; exchange rate movement; Exchange rates; Real exchange rates; Plurilateral trade; Exchange rate arrangements; International trade organizations; Western Hemisphere; Africa; Global; Middle East; Central and Eastern Europe; exchange rate uncertainty; Nominal effective exchange rate; Real effective exchange rates
Legal-disclaimer:
The views expressed in this book are those of the authors and should not be reported as or attributed to the International Monetary Fund, its Executive Board, or the governments of any of its member countries.
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