Protectionism, bilateral integration, and the cross section of exchange rate returns in US presidential debates

Jantke de Boer, Stefan Eichler and Ingmar Rövekamp

Journal of International Money and Finance, 2024, vol. 147, issue C

Abstract: We study the impact of US presidential election TV debates on the cross section of intraday exchange rate returns of 96 currencies from 1996 to 2016. The performance of the candidates in the debate is an exogenous shock to the election probability. We find that currencies of countries with high levels of bilateral foreign trade with the US depreciate if the election probability of the protectionist candidate increases during the debate, while no significant impact is detected for countries with bilateral US exports to GDP below 2 percent. Expectations about protectionist measures are the main transmission channel of debate outcomes, while the candidates' stance towards military and immigration play a minor role.

Keywords: Exchange rates; US presidential elections; TV debates; Protectionism; Bilateral trade integration (search for similar items in EconPapers)
JEL-codes: D72 F31 G14 G15 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jimfin:v:147:y:2024:i:c:s0261560624001219

DOI: 10.1016/j.jimonfin.2024.103134

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