Exchange rates as shock absorbers: The role of export margins
Lilia Cavallari () and
Authors registered in the RePEc Author Service: Stefano d'Addona ()
Research in Economics, 2015, vol. 69, issue 4, 582-602
This study addresses the role of floating exchange rates as shock absorbers when trade involves previously traded goods (intensive margin) as well as new goods and previously non-traded goods (extensive margin). In a panel VAR model of 23 developed economies, we first document that adjustment to real shocks occurs mainly at the extensive margin and particularly so in fixed regimes. This in turn amplifies output fluctuations. We then propose a model with firm entry and endogenous selection of exporters that generates dynamics in line with the estimated responses.
Keywords: Export margins; Firm entry; International business cycle; Terms of trade shock; Exchange rate regimes (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:69:y:2015:i:4:p:582-602
Access Statistics for this article
Research in Economics is currently edited by Federico Etro
More articles in Research in Economics from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().