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Exchange rate movements and trade balances in selected ASEAN countries

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  • Taguchi, Hiroyuki

Abstract

This article examined the exchange rate movements and their impact on the external balances in the 1990s in the selected ASEAN countries. The main findings are as follows. The real effective exchange rate (REER) - the relative prices against the world competitors - shows a trend of appreciation before the 1997 currency crises. When the role of competitors is taken into account, pegging exchange rates may have entailed appreciation of currencies in real effective terms. Moreover, the elasticity on the REER for exports is well determined. This observation implies that the drastic currency depreciation of the sample countries in 1997 may contribute toward recovering export growth through improvements in their price competitiveness. The recent export growth in Thailand seems to be one of the symptoms.

Suggested Citation

  • Taguchi, Hiroyuki, 1998. "Exchange rate movements and trade balances in selected ASEAN countries," MPRA Paper 63784, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:63784
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    References listed on IDEAS

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    1. Takatoshi Ito & Mr. Tamim Bayoumi & Mr. Peter Isard & Mr. Steven A. Symansky, 1996. "Exchange Rate Movements and Their Impact on Trade and Investment in the APEC Region," IMF Occasional Papers 1996/011, International Monetary Fund.
    2. Mr. Peter J Montiel & Bijan B. Aghevli & Mr. Mohsin S. Khan, 1991. "Exchange Rate Policy in Developing Countries: Some Analytical Issues," IMF Occasional Papers 1991/009, International Monetary Fund.
    3. Isard,Peter, 1995. "Exchange Rate Economics," Cambridge Books, Cambridge University Press, number 9780521466004.
    4. World Bank, 1997. "Global Economic Prospects and the Developing Countries 1997," World Bank Publications - Books, The World Bank Group, number 32392, December.
    5. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584-584.
    6. Takatoshi Ito & Anne O. Krueger, 1994. "Macroeconomic Linkage: Savings, Exchange Rates, and Capital Flows," NBER Books, National Bureau of Economic Research, Inc, number ito_94-1, March.
    7. Isard,Peter, 1995. "Exchange Rate Economics," Cambridge Books, Cambridge University Press, number 9780521460477.
    8. Taguchi, Hiroyuki, 1998. "The sustainability of foreign borrowing in selected ASEAN countries," MPRA Paper 63783, University Library of Munich, Germany.
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    Cited by:

    1. Taguchi, Hiroyuki, 2009. "The real effective exchange rate and trade balance in selected ASEAN countries," MPRA Paper 63216, University Library of Munich, Germany.
    2. Taguchi, Hiroyuki, 2002. "Exchange rate management in selected East Asian countries after the financial crisis," MPRA Paper 63785, University Library of Munich, Germany.
    3. Taguchi, Hiroyuki, 2002. "Exchange rate management and trade balance in selected East Asian countries," MPRA Paper 63638, University Library of Munich, Germany.

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    More about this item

    Keywords

    exchange rate; trade balance; ASEAN;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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