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Impact of exchange rate uncertainty on commodity trade between US and Sweden

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  • Mohsen Bahmani-Oskooee
  • Massomeh Hajilee

Abstract

Previous studies that investigated the effects of exchange rate uncertainty on the trade flows of Sweden employed aggregate trade data either between Sweden and the rest of the world or at bilateral level between Sweden and her major trading partners. In this article, we disaggregate the trade data and employ the import and export data from 87 industries that trade between Sweden and the US. We find that exchange rate volatility has significant short-run effects on the trade flows between the two countries in almost two-third of the industries. However, the short-run effects are translated into the long-run effects in one-third of the cases. Furthermore, the real depreciation of krona against the dollar was found to have favourable effects on the overall trade balance between the two countries.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Massomeh Hajilee, 2011. "Impact of exchange rate uncertainty on commodity trade between US and Sweden," Applied Economics, Taylor & Francis Journals, vol. 43(24), pages 3231-3251.
    • Handle: RePEc:taf:applec:v:43:y:2011:i:24:p:3231-3251
    DOI: 10.1080/00036840903508361
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    Cited by:

    1. Linh T.D. Huynh & Hien Thanh Hoang, 2019. "Effects of exchange rate volatility on bilateral import performance of Vietnam: A dynamic Generalised method of Moments panel approach," International Economic Journal, Taylor & Francis Journals, vol. 33(1), pages 88-110, January.
    2. Haider Mahmood & Tarek Tawfik Yousef Alkhateeb & Tarek Tawfik Yousef Alkhateeb, 2017. "Testing Asymmetrical Effect of Exchange Rate on Saudi Service Sector Trade: A Non-linear Auto-regressive Distributive Lag Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 73-77.
    3. Nathan Audu & Titus Obiezue, 2022. "Exchange Rate and Trade in Services Nexus in Nigeria: A Non-Linear ARDL Approach," Athens Journal of Business & Economics, Athens Institute for Education and Research (ATINER), vol. 8(1), pages 79-96, January.
    4. Wang, Yi-Hsien & Lee, Jun-De, 2012. "Estimating the import demand function for China," Economic Modelling, Elsevier, vol. 29(6), pages 2591-2596.

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