THE IMPACT OF G-3 EXCHANGE RATE VOLATILITY ON DEVELOPING COUNTRIES

Gerardo Esquivel () and Felipe LARRAIN B.

No 16, G-24 Discussion Papers from United Nations Conference on Trade and Development

Abstract: This paper describes G-3 exchange rate volatility and evaluates its impact on developing countries. The paper presents empirical evidence showing that G-3 exchange rate volatility has a robust and significantly negative impact on developing countries’ exports. A one percentage point increase in G-3 exchange rate volatility decreases real exports of developing countries by about 2 per cent, on average. G-3 exchange rate volatility also appears to have a negative influence on foreign direct investment to certain regions, and increases the probability of occurrence of exchange rate crises in developing countries. These results imply that greater stability in the international exchange rate system would help improve trade and foreign direct investment prospects for developing countries – and would help prevent currency crises.

Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://unctad.org/system/files/official-document/pogdsmdpbg24d16.en.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
Working Paper: The Impact of G-3 Exchange Rate Volatility on Developing Countries (2002)
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: https://EconPapers.repec.org/RePEc:unc:g24pap:16

Access Statistics for this paper

More papers in G-24 Discussion Papers from United Nations Conference on Trade and Development Contact information at EDIRC.
Bibliographic data for series maintained by Joerg Mayer ( this e-mail address is bad, please contact ).