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Empirical Evidence On The Correlation Between The Exchange Rate And Romanian Exports

Author

Listed:
  • Cojanu, Valentin
  • Paun, Cristian
  • Lupu, Radu

Abstract

Few subjects of international economics are so much exposed to heated debates as the exchange rate problem. From monetary crises and balance-of-payments adjustments to monetary zones, dealing with currency swings seems to embody any economist's worries about the rightfulness of economic models and the relevance of empirical analyses he or she has to choose. Is appreciation or depreciation good for a country's welfare? Would that answer still be valid in the long run? The unsettled character of the problem largely resides in the manifest contradiction between the firm theoretical predictions and their unconvincing empirical testing. One of the least uncontroversial tenets refers to the positive correlation between currency depreciation or devaluation (although of different origins, their effects are generally the same) and a country's current account. This paper attempts to test this prediction on the case of Romanian economy and to conclude on possible explanations of the theoretical-empirical conflict.

Suggested Citation

  • Cojanu, Valentin & Paun, Cristian & Lupu, Radu, 2006. "Empirical Evidence On The Correlation Between The Exchange Rate And Romanian Exports," MPRA Paper 7060, University Library of Munich, Germany, revised 02 Feb 2008.
  • Handle: RePEc:pra:mprapa:7060
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    File URL: https://mpra.ub.uni-muenchen.de/7060/1/MPRA_paper_7060.pdf
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    More about this item

    Keywords

    exports; exchange rate; elasticity;

    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • F2 - International Economics - - International Factor Movements and International Business
    • F1 - International Economics - - Trade

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