Exchange Rate Volatility and Grain Trade: A Gravity Model Analysis at the Sectoral Level

Sandro Steinbach

No 209225, 55th Annual Conference, Giessen, Germany, September 23-25, 2015 from German Association of Agricultural Economists (GEWISOLA)

Abstract: There has been a controversy among economists on whether exchange rate volatility has a negative effect on trade. We will investigate this issue by making use of a sectoral gravity model of global grain trade. Our identification strategy carefully addresses endogeneity issues present in earlier studies. Using a long panel, we are able to show that exchange rate volatility has a negative impact on bilateral export trade flows. The magnitude of this effect can vary widely, depending on the market under study, which is an indicator for substantial heterogeneity among sectors.

Keywords: Agricultural and Food Policy; International Relations/Trade (search for similar items in EconPapers)
Pages: 3
Date: 2015
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Persistent link: https://EconPapers.repec.org/RePEc:ags:gewi15:209225

DOI: 10.22004/ag.econ.209225

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