Dollar invoicing, exchange rates and international trade

David Cook and Nikhil Patel
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David Cook: Hong Kong University of Science and technology
Nikhil Patel: Bank for International Settlements

A chapter in The price, real and financial effects of exchange rates, 2018, vol. 96, pp 108-121 from Bank for International Settlements

Abstract: This paper studies the role of exchange rates and dollar invoicing in driving the dynamics of international trade flows. It uses a granular decomposition of trade flows at the bilateral level to highlight a bifurcation, whereby in response to a rise in US interest rates, final goods trade between non-US countries, as well as trade that is more regionally oriented, declines by more than does trade that is global value chainoriented. These results highlight an important role played by global value chains in mitigating the negative impact of external shocks.

Date: 2018
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:bis:bisbpc:96-11

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