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The Impact of Exchange Rate Risk on Intercountry Trade and Production

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  • Amann, Erwin
  • Rommich, Michael

Abstract

Analysing various arrangements of intercountry trade, this paper investigates the impact of exchange rate risk on production and expected trade. It addresses the question how a mean-preserving spread of the exchange rate distribution effects strategic aspects of different trading arrangements. It is shown that in an uncertain environment the efficiency loss induced by double marginalization can in general not be overcome by negotiation. Copyright 1999 by Blackwell Publishing Ltd.

Suggested Citation

  • Amann, Erwin & Rommich, Michael, 1999. "The Impact of Exchange Rate Risk on Intercountry Trade and Production," Review of International Economics, Wiley Blackwell, vol. 7(2), pages 297-305, May.
  • Handle: RePEc:bla:reviec:v:7:y:1999:i:2:p:297-305
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    Cited by:

    1. Miller, Andrew D. & Langley, Suchada V. & Chambers, William, 2003. "Current Issues Affecting Trade And Trade Policy: An Annotated Literature Review," Working Papers 14606, International Agricultural Trade Research Consortium.

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