Exchange Rate Risk, Exchange Rate Regime and the Volume of International Trade
The authors examine the effect of exchange-rate regimes on the volume of internatio nal trade. Bilateral trade flows among countries with floating exchan ge rates are higher than those among countries with fixed rates. Whil e exchange-rate risk does reduce the volume of trade among countries regardless of the nature of their exchange-rate regime, the greater r isk faced by traders in floating exchange-rate countries is more than offset by the trade-reducing effects of restrictive commercial polic ies imposed by fixed exchange rate countries. Copyright 1988 by WWZ and Helbing & Lichtenhahn Verlag AG
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Volume (Year): 41 (1988)
Issue (Month): 2 ()
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