The Causal Effects of Expected Depreciations

Martha Elena Delgado, Juan David Herreño, Marc Hofstetter and Mathieu Pedemonte

No 13761, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: We estimate the causal effects of a shift in the future expected exchange rate of a local currency against the US dollar on a representative sample of firms in a small open economy. We survey a nationally representative sample of firms and provide the one-year-ahead nominal exchange rate forecast published by the local central bank to a random sub-sample of firm managers. This information treatment is effective in shifting exchange rate expectations and perceptions. These effects are persistent and larger for non-exporting firms. Linking survey responses with administrative census data, we estimate a positive elasticity of current import expenditures to a future expected depreciation. Our estimates highlight the intertemporal margin of trade to anticipated changes in trade costs.

Keywords: Expectations; exchange rate; Firms; Trade (search for similar items in EconPapers)
JEL-codes: E31 E71 F31 G41 (search for similar items in EconPapers)
Date: 2024-10
New Economics Papers: this item is included in nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://publications.iadb.org/publications/english ... ed-depreciations.pdf (application/pdf)

Related works:
Working Paper: The Causal Effects of Expected Depreciations (2024)
Working Paper: The Causal Effects of Expected Depreciations (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:13761

DOI: 10.18235/0013188

Access Statistics for this paper

More papers in IDB Publications (Working Papers) from Inter-American Development Bank Contact information at EDIRC.
Bibliographic data for series maintained by Felipe Herrera Library ().