Exchange Rate Uncertainty and Import Demand of Thailand

Komain Jiranyakul

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates the impact of real exchange rate uncertainty on import demand of Thailand. The period of study is during July 1997 to December 2011. The results from bounds testing for cointegration show that all variables are cointegrated. Even though there is no short-run impact, but the long-run negative impact of real exchange rate uncertainty on real imports is large and highly significant under the floating exchange rate regime. In the long run, a rise in real exchange rate uncertainty can improve the country’s trade balance by substantially lowering import demand, but can harm industrial production at the same time. Therefore, stabilization of real effective exchange rate via major nominal exchange rates may deem necessary.

Keywords: Exchange rate uncertainty; GARCH; imports; ARDL bounds testing (search for similar items in EconPapers)
JEL-codes: F11 F14 (search for similar items in EconPapers)
Date: 2013-03
New Economics Papers: this item is included in nep-sea
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Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Exchange Rate Uncertainty and Import Demand of Thailand (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:45216

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