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On the trade impact of nominal exchange rate volatility

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  • Silvana Tenreyro

Abstract

What is the effect of nominal exchange rate variability on trade? I argue that the methods conventionally used to answer this perennial question are plagued by a variety of sources of systematic bias. I propose a novel approach that simultaneously addresses all of these biases, and present new estimates from a broad sample of countries from 1970 to 1997. The answer to the question is: Not much.

Suggested Citation

  • Silvana Tenreyro, 2003. "On the trade impact of nominal exchange rate volatility," Working Papers 03-2, Federal Reserve Bank of Boston.
  • Handle: RePEc:fip:fedbwp:03-2
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    Foreign exchange rates; International trade;

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