IDEAS home Printed from https://ideas.repec.org/p/eea/boewps/wp2003-09.html
   My bibliography  Save this paper

The relationship between REER and trade flows in the context of the equilibrium exchange rate

Author

Listed:
  • Reimo Juks

Abstract

The paper focuses on the time-series analysis of the traditional trade equations. The results from the cointegration, ARDL and Granger causality analyses of trade elasticities cast some doubt on the usefulness of the internal-external balance approach to the equilibrium exchange rate. The long-run impact of the REER on trade flows turned out to be statistically insignificant, being independent of method and specification of the model employed. The latter implies a secondary role for the REER in achieving a sustainable position of external balance.

Suggested Citation

  • Reimo Juks, 2003. "The relationship between REER and trade flows in the context of the equilibrium exchange rate," Bank of Estonia Working Papers 2003-9, Bank of Estonia, revised 11 Nov 2003.
    • Handle: RePEc:eea:boewps:wp2003-09
    as

    Download full text from publisher

    File URL: http://www.eestipank.info/pub/en/dokumendid/publikatsioonid/seeriad/uuringud/_2003/_9_2003/wp_903.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Riedel, James, 1988. "The Demand for LDC Exports of Manufactures: Estimates from Hong Kong," Economic Journal, Royal Economic Society, vol. 98(389), pages 138-148, March.
    2. Baffes, John & Elbadawi, Ibrahim A. & O'Connell, Stephen A., 1997. "Single-equation estimation of the equilibrium real exchange rate," Policy Research Working Paper Series 1800, The World Bank.
    3. Granger, C. W. J., 1988. "Some recent development in a concept of causality," Journal of Econometrics, Elsevier, vol. 39(1-2), pages 199-211.
    4. Pantula, Sastry G., 1989. "Testing for Unit Roots in Time Series Data," Econometric Theory, Cambridge University Press, vol. 5(2), pages 256-271, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marit Hinnosaar & Hannes Kaadu & Lenno Uuskula, 2005. "Estimating the equilibrium exchange rate of the Estonian kroon," Bank of Estonia Working Papers 2005-2, Bank of Estonia, revised 10 Oct 2005.
    2. Lommatzsch, Kirsten & Silgoner, Maria A. & Ramskogler, Paul, 2016. "Trade in value added: Do we need new measures of competitiveness?," Discussion Papers 52/2016, Deutsche Bundesbank.
    3. Rasmus Kattai, 2005. "EMMA - A Quarterly Model of the Estonian Economy," Bank of Estonia Working Papers 2005-12, Bank of Estonia, revised 12 Dec 2005.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marit Hinnosaar & Hannes Kaadu & Lenno Uuskula, 2005. "Estimating the equilibrium exchange rate of the Estonian kroon," Bank of Estonia Working Papers 2005-2, Bank of Estonia, revised 10 Oct 2005.
    2. Rahman, Md. Nafizur & Nower, Nowshin & Abbas, Syed Mahdee & Nahian, Abdullah Hill & Tushar, Md. Raqibul Hasan, 2020. "Introduction of Bond Market: Would it be a possible Solution for Bangladesh?," MPRA Paper 101159, University Library of Munich, Germany.
    3. Kalaitzi, Athanasia Stylianou & Chamberlain, Trevor William, 2021. "The validity of the export-led growth hypothesis: some evidence from the GCC," LSE Research Online Documents on Economics 106586, London School of Economics and Political Science, LSE Library.
    4. Kalaitzi, Athanasia & Chamberlain, Trevor W., 2019. "Further evidence on export-led growth in the United Arab Emirates: are non-oil exports or re-exports the key to economic growth?," LSE Research Online Documents on Economics 103827, London School of Economics and Political Science, LSE Library.
    5. Chien-Chung Nieh, 2002. "The effect of the Asian financial crisis on the relationships among open macroeconomic factors for Asian countries," Applied Economics, Taylor & Francis Journals, vol. 34(4), pages 491-502.
    6. Athanasia S. Kalaitzi & Emmanuel Cleeve, 2018. "Export-led growth in the UAE: multivariate causality between primary exports, manufactured exports and economic growth," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 8(3), pages 341-365, September.
    7. Chandran, V.G.R. & Tang, Chor Foon, 2013. "The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 445-453.
    8. Mouawiya Al-Awad & Nasri Harb, 2005. "Financial development and economic growth in the Middle East," Applied Financial Economics, Taylor & Francis Journals, vol. 15(15), pages 1041-1051.
    9. Tang, Chor Foon & Tan, Bee Wah, 2015. "The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam," Energy, Elsevier, vol. 79(C), pages 447-454.
    10. Athanasia S. Kalaitzi, 2018. "The Causal Effects of Trade and Technology Transfer on Human Capital and Economic Growth in the United Arab Emirates," Sustainability, MDPI, vol. 10(5), pages 1-15, May.
    11. Kalaitzi, Athanasia S. & Chamberlain, Trevor W., 2020. "Merchandise exports and economic growth: multivariate time series analysis for the United Arab Emirates," LSE Research Online Documents on Economics 103781, London School of Economics and Political Science, LSE Library.
    12. Augustine Arize & John Malindretos & Krishna Kasibhatla, 2003. "Does exchange-rate volatility depress export flows: The case of LDCs," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 9(1), pages 7-19, February.
    13. Levent, Korap, 2007. "Modeling purchasing power parity using co-integration: evidence from Turkey," MPRA Paper 19584, University Library of Munich, Germany.
    14. Loperfido, Nicola, 2010. "A note on marginal and conditional independence," Statistics & Probability Letters, Elsevier, vol. 80(23-24), pages 1695-1699, December.
    15. Taufiq Choudhry & Mohammad Hasan, 2008. "Exchange Rate Regime and Demand for Reserves: Evidence from Kenya, Mexico and Philippines," Open Economies Review, Springer, vol. 19(2), pages 167-181, April.
    16. Salman Haider & Aadil Ahmad Ganaie & Bandi Kamaiah, 2019. "Total Factor Productivity and Openness in Indian Economy: 1970–2011," Foreign Trade Review, , vol. 54(1), pages 46-57, February.
    17. Marie-Ange VEGANZONES-VAROUDAKIS & NABLI, 2002. "Exchange Rate Regime and Competitiveness of Manufactured Exports: The case of MENA Countries," Working Papers 200230, CERDI.
    18. Olusanya, Oluwakorede, 2016. "Causality between Human Resource Development and the Nigerian Economic Performance," MPRA Paper 100854, University Library of Munich, Germany.
    19. Roberto Cellini & Tiziana Cuccia, 2013. "Museum and monument attendance and tourism flow: a time series analysis approach," Applied Economics, Taylor & Francis Journals, vol. 45(24), pages 3473-3482, August.
    20. Isabel Cortés-Jiménez & Manuel Artís, 2005. "The role of the tourism sector in economic development - Lessons from the Spanish experience," ERSA conference papers ersa05p488, European Regional Science Association.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eea:boewps:wp2003-09. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Peeter Luikmel (email available below). General contact details of provider: https://edirc.repec.org/data/epgovee.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.