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“Exchange Rate Volatility and International Trade Growth: Evidence from Bangladesh”

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  • Md Shoaib Ahmed, Shoaib

Abstract

This is a study to investigate the exchange rate volatility and it impacts on international trade growth: evidence from Bangladesh. To establish the empirical relationship between exchange rate volatility and impact on international trade growth in Bangladesh, different quantitative techniques are used by considering the data from May 2003 to December 2008. In the analysis co-integration and error correction methods have been used to do the analysis the relationship between exchange rate volatility and international trade growth in Bangladesh. From the investigation, the result shows that the exchange rate volatility has a negative and major effect both in short run and long run with Western European and North American countries. There is a negative and significant relationship has been observed between exchange rate volatility and the international trade growth.

Suggested Citation

  • Md Shoaib Ahmed, Shoaib, 2009. "“Exchange Rate Volatility and International Trade Growth: Evidence from Bangladesh”," MPRA Paper 19466, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:19466
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    File URL: https://mpra.ub.uni-muenchen.de/19466/1/MPRA_paper_19466.pdf
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    References listed on IDEAS

    as
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    3. Thursby, Jerry G & Thursby, Marie C, 1987. "Bilateral Trade Flows, the Linder Hypothesis, and Exchange Risk," The Review of Economics and Statistics, MIT Press, vol. 69(3), pages 488-495, August.
    4. Cushman, David O., 1983. "The effects of real exchange rate risk on international trade," Journal of International Economics, Elsevier, vol. 15(1-2), pages 45-63, August.
    5. Chowdhury, Abdur R, 1993. "Does Exchange Rate Volatility Depress Trade Flows? Evidence from Error-Correction Models," The Review of Economics and Statistics, MIT Press, vol. 75(4), pages 700-706, November.
    6. Richard Baldwin & Paul Krugman, 1989. "Persistent Trade Effects of Large Exchange Rate Shocks," The Quarterly Journal of Economics, Oxford University Press, vol. 104(4), pages 635-654.
    7. Paul De Grauwe, 1988. "Exchange Rate Variability and the Slowdown in Growth of International Trade," IMF Staff Papers, Palgrave Macmillan, vol. 35(1), pages 63-84, March.
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    Keywords

    Key words: Co-integration; Error Correction; Exchange Rate; Volatility; Export growth; Trade growth.;

    JEL classification:

    • C0 - Mathematical and Quantitative Methods - - General
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C01 - Mathematical and Quantitative Methods - - General - - - Econometrics

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