Economics at your fingertips  

Exchange rate hysteresis in UK imports from South Asian countries

Nusrate Aziz and Ahmad H Ahmad

No 2018-03, Discussion Papers from University of Nottingham, CREDIT

Abstract: We investigate and find evidence for the hysteresis hypothesis in UK imports from South Asian countries, using a monthly sample data that covers 1999 to 2012. This paper finds evidence of the asymmetric effect of exchange rate volatility that ‘large’ depreciations significantly reduce UK imports from Bangladesh; however, ‘large’ appreciations do not increase the imports significantly. We also find a partial support for exchange rate hysteresis in UK imports from India, Pakistan and Sri Lanka. We find that hysteresis can be both country- and commodity-dependent, which is largely consistent with previous empirical studies. Theoretical literature suggests that hysteresis occurs due to the presence of sunk costs, but we find that sunk costs alone do not explain the level of hysteresis.

Keywords: inverse relationship; agriculture; Tanzania (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

Downloads: (external link) (application/pdf)

Related works:
Journal Article: Exchange rate hysteresis in the UK imports from the South Asian Countries (2018) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this paper

More papers in Discussion Papers from University of Nottingham, CREDIT School of Economics University of Nottingham University Park Nottingham NG7 2RD. Contact information at EDIRC.
Bibliographic data for series maintained by Hilary Hughes ().

Page updated 2022-06-17
Handle: RePEc:not:notcre:18/03