IDEAS home Printed from https://ideas.repec.org/p/red/sed011/1336.html
   My bibliography  Save this paper

Export Dynamics and Business Cycles in Emerging Economies

Author

Listed:
  • Vivian Z. Yue

    (New York University)

  • Sangeeta Pratap

    (CUNY-Hunter)

  • George Alessandria

    (Federal Reserve Bank of Philadelphia)

Abstract

We first study export dynamics in a number of large devaluation episodes in emerging markets. Using plant level data, we document that exports expand gradually following a large devaluation primarily because the number of exporters expands gradually. We further show the strong negative correlation between interest rates and exports, which is a new fact in strong contrast to the positive link between real exchange rate and exports. We examine the role of interest rate movements and sunk cost of exporting in a small open economy RBC model. We show that a model of exporter dynamics with sunk and fixed costs of exporting can generate most of the gradual rise in export participation from aggregate productivity shocks and global interest rate shocks. Countercyclical interest rates lower the present value of exporting following the devaluation discouraging exporting and partially offsetting the effect on trade from the change in relative prices. The model’s business cycle exporter dynamics are consistent with that of emerging economies. Moreover, model results reveal that export decision can have important aggregate effects.

Suggested Citation

  • Vivian Z. Yue & Sangeeta Pratap & George Alessandria, 2011. "Export Dynamics and Business Cycles in Emerging Economies," 2011 Meeting Papers 1336, Society for Economic Dynamics.
  • Handle: RePEc:red:sed011:1336
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a search for a similarly titled item that would be available.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:red:sed011:1336. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Christian Zimmermann (email available below). General contact details of provider: https://edirc.repec.org/data/sedddea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.