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Do inpayments and outpayments respond to exchange rate changes asymmetrically: Evidence from Malaysia

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  • Mohsen Bahmani-Oskooee
  • Hanafiah Harvey

Abstract

Since the 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 also react to exchange rate changes asymmetrically. 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.

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  • Mohsen Bahmani-Oskooee & Hanafiah Harvey, 2018. "Do inpayments and outpayments respond to exchange rate changes asymmetrically: Evidence from Malaysia," The International Trade Journal, Taylor & Francis Journals, vol. 32(4), pages 317-342, August.
    • Handle: RePEc:taf:uitjxx:v:32:y:2018:i:4:p:317-342
    DOI: 10.1080/08853908.2018.1425167
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    2. Jungho Baek & Jee Hee Yoon, 2023. "The Korea‐Vietnam trade and the bilateral exchange rate: Asymmetric evidence from commodity trade data," Australian Economic Papers, Wiley Blackwell, vol. 62(1), pages 124-148, March.

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    JEL classification:

    • F3 - International Economics - - International Finance
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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