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On the impact of exchange rate volatility on Tunisia’s trade with 16 partners: an asymmetry analysis

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  • Mohsen Bahmani-Oskooee

    (The University of Wisconsin-Milwaukee)

  • Ridha Nouira

    (Monastir University)

Abstract

Exchange rate uncertainty measured by its volatility is said to affect trade flows in either direction. A limited number of recent studies show that the response of trade flows to exchange rate volatility could be asymmetric, mostly due to change in traders’ expectations. In this paper, we test the symmetric and asymmetric effects of exchange rate volatility on Tunisia’s bilateral trade with each of its 16 partners. We find that Tunisia’s trade flows to each partner are affected asymmetrically in the short run but not in the long run. In almost half of the sample, the long-run effects were symmetric.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Ridha Nouira, 2020. "On the impact of exchange rate volatility on Tunisia’s trade with 16 partners: an asymmetry analysis," Economic Change and Restructuring, Springer, vol. 53(3), pages 357-378, August.
    • Handle: RePEc:kap:ecopln:v:53:y:2020:i:3:d:10.1007_s10644-019-09250-y
    DOI: 10.1007/s10644-019-09250-y
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    3. Mohsen Bahmani-Oskooee & Nazif Durmaz, 2021. "Exchange rate volatility and Turkey–EU commodity trade: an asymmetry analysis," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 48(2), pages 429-482, May.
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    More about this item

    Keywords

    Exchange rate volatility; Tunisia; Sixteen trading partners; Asymmetry analysis;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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