Long-run Exchange Rate Sensitivity of Serbian Exports and Imports

Nikola Tasiæ and Miroslav Zdravkoviæ
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Nikola Tasiæ: National Bank of Serbia
Miroslav Zdravkoviæ: National Bank of Serbia

Working papers from National Bank of Serbia

Abstract: Motivated by the theory that suggests that Serbian exporters bear a burden of “strong” dinar, this paper investigates the relationship between exchange rate and foreign trade. The contribution of this paper is the estimate of the long-run impact of exchange rate on exports and imports for several industry groups. The estimated elasticity of exports with respect to real exchange rate is about 0.5, suggesting that the potential changes in the exchange rate policy would yield relatively small benefits for exporters. On the other hand, long-run relationship of imports and the exchange rate is not confirmed, while the aggregate wages, salaries, and pensions have the strongest effect on imports in the long run.

Keywords: exchange rate; imports; exports (search for similar items in EconPapers)
JEL-codes: E44 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba and nep-mon
Date: 2008-09
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