Do Inpayments and Outpayments Respond to Exchange Rate Changes Asymmetrically? Evidence from Malaysia

Mohsen Bahmani-Oskooee and Hanafiah Harvey

MPRA Paper from University Library of Munich, Germany

Abstract: Since pass-through of exchange rate changes on import and export prices are asymmetric, we expect a country’s inpayments (export earnings) and outpayments (cost of imports) to react to exchange rate changes asymmetrically too. We demonstrate this hypothesis by considering trade between Malaysia and each of her 11 largest trading partners. We find that while the short-run effects of exchange rate changes on Malaysia’s inpayments and outpayments are asymmetric with all partners, the long-run asymmetric effects are present in less than half of the partners. The results are partner-specific.

Keywords: Malaysia; Trading Partners; Inpayments; Outpayments; Exchange Rate; Asymmetry Analysis (search for similar items in EconPapers)
JEL-codes: F3 F31 (search for similar items in EconPapers)
Date: 2017-04-12, Revised 2017-04-30
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