The Impact of Exchange Rate Risk on Intercountry Trade and Production
Erwin Amann and
Michael Rommich
Review of International Economics, 1999, vol. 7, issue 2, 297-305
Abstract:
Analysing various arrangements of intercountry trade, this paper investigates the impact of exchange rate risk on production and expected trade. It addresses the question how a mean-preserving spread of the exchange rate distribution effects strategic aspects of different trading arrangements. It is shown that in an uncertain environment the efficiency loss induced by double marginalization can in general not be overcome by negotiation. Copyright 1999 by Blackwell Publishing Ltd.
Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:bla:reviec:v:7:y:1999:i:2:p:297-305
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