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The effects of real exchange rate misalignment and real exchange volatility on exports

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  • Diallo, Ibrahima Amadou

Abstract

This paper uses panel data cointegration techniques to study the impacts of real exchange rate misalignment and real exchange rate volatility on total exports for a panel of 42 developing countries from 1975 to 2004. The results show that both real exchange rate misalignment and real exchange rate volatility affect negatively exports. The results also illustrate that real exchange rate volatility is more harmful to exports than misalignment. These outcomes are corroborated by estimations on subsamples of Low-Income and Middle-Income countries.

Suggested Citation

  • Diallo, Ibrahima Amadou, 2011. "The effects of real exchange rate misalignment and real exchange volatility on exports," MPRA Paper 32387, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:32387
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    File URL: https://mpra.ub.uni-muenchen.de/32387/1/MPRA_paper_32387.pdf
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    References listed on IDEAS

    as
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    4. Sebastian Edwards, 2000. "Capital Flows, Real Exchange Rates, and Capital Controls: Some Latin American Experiences," NBER Chapters,in: Capital Flows and the Emerging Economies: Theory, Evidence, and Controversies, pages 197-246 National Bureau of Economic Research, Inc.
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    6. 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.
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    More about this item

    Keywords

    real effective exchange rate; misalignment; volatility; exports; pooled mean group estimator;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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