Dynamic Links Between Unexpected Exchange Rate Variation, Prices, and International Trade

Chongcheul Cheong (), Tesfa Mehari and Leighton Vaughan Williams ()

Open Economies Review, 2006, vol. 17, issue 2, 233 pages

Abstract: This paper investigates dynamic interrelations between exchange rate uncertainty, international trade, and trading competitiveness in prices, using UK data. The empirical results derived from vector autoregressive (VAR) models show that a shock to exchange rate volatility negatively affects trade volumes, and such negative effects are greater than the effects on trade price levels. Copyright Springer Science + Business Media, LLC 2006

Keywords: exchange rate volatility; import/export prices; trade volumes (search for similar items in EconPapers)
Date: 2006
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DOI: 10.1007/s11079-006-4745-9

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