Exchange Rates and Trade: A Disconnect?

Daniel Leigh, Weicheng Lian, Marcos Poplawski Ribeiro, Rachel Szymanski, Viktor Tsyrennikov and Hong Yang
Authors registered in the RePEc Author Service: Marcos Poplawski-Ribeiro

No 2017/058, IMF Working Papers from International Monetary Fund

Abstract: We examine the stability and strength of the relationship between exchange rates and trade over time using three alternative approaches, mitigating the endogeneity of the relation. We find that both exchange rate pass-through and the price elasticity of trade volumes are largely stable over time. Economic slack and financial conditions affect the relationship, but there is limited evidence that participation in global value chains has significantly changed the exchange rate–trade relationship over time.

Keywords: WP; trade elasticity; real GDP; producer price index; exchange rate disconnect; global trade; exchange rates and trade; price elasticity; depreciation episode; trade volume; exchange rate-trade; trade equation; export price response; Exchange rates; Export prices; Exports; Depreciation; Exchange rate pass-through; Global; Europe; Asia and Pacific; Africa (search for similar items in EconPapers)
Pages: 52
Date: 2017-03-15
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Citations: View citations in EconPapers (32)

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