Universal Exchange and Trade Rates

  • Israel O.E Idewele Department of Banking and Finance, Veritas University, Bwari, Abuja
Keywords: trade volume; real; exchange rate; gravity; model; global value chains

Abstract

This paper dissects the connection between universal exchange and conversion scale levels with regards to the worldwide money related emergency (GFC) and the ascent of worldwide and provincial esteem chains (GVCs). Utilizing two-sided information for 72 economies over the 2001– 2015 period, we locate a positive connection between the genuine conversion standard and fare volume pre-GFC; however this relationship for the most part vanishes post-GFC. We additionally analyze the effect of extending GVCs on exchange and on the conversion scale exchange connect channel. The examination affirms that expanded investment in GVCs brings down the effect of the conversion standard on fares, and could be a contributing element to debilitating connections between trade rates and exchange. Ultimately, other auxiliary variables, for example, import organization and load of transient outside obligation of exporters and merchants, appear to significantly affect exchange execution yet less effect on the conversion scale exchange connect channel post-GFC.

Downloads

Download data is not yet available.

References

Ahmed, S., Appendido, M., & Ruta, M. (2015a). Global value chains and the exchange rate elasticity of exports. International Monetary Fund Working Paper. 15 (552). International Monetary Fund. Washington, D.C.
Ahmed, S., Appendido, M., & Ruta, M. (2015b). Depreciation without exports? Global value chains and the exchange rate elasticity of exports. World Bank Policy Research Working Paper. 7390, World Bank, Washington, D.C.
Anderson, J. E., & van Wincoop, E. (2003). Gravity with gravitas: A solution to the border puzzle. American Economic Review, 93, 170–192.
Appuhamilage, A., & Senanayake, K. (2010). Exchange rate movements’ effect on Sri Lanka-China trade. Journal of Chinese Economy and Foreign Trade Studies, 3(3), 254–267.
Aristotelous, K. (2001). Exchange-rate volatility, exchange-rate regime, and trade volume:
Evidence from the UK-US export function (1989–1999). Economic Letter, 72, 87–89.
Asian Development Bank (2016). Asian economic integration report 2016. ADB. Manila, Philippines.
Bacchetta, P., & van Wincoop, E. (2000). Does exchange-rate stability increase trade and welfare? The American Economic Review, 90(5).
Baek, J. (2012). Exchange rate sensitivity of Korea-US bilateral trade: Evidence from industrial trade data. Journal of Korea Trade, 16, 1–21.
Burstein, A., & Gopinath, G. (2014). International prices and exchange rates. Handbook of International Economics, 4, 391–451.
Campa, J. M., & Goldberg, L. S. (2005). Exchange rate pass-through into import prices: A macro or micro phenomenon? NBER Working Paper No. 8934. National Bureau of Economic Research, Cambridge, MA.
Development of “Deutsch Für Touristmus” Teaching Based On Livejournal Website to Improve Student Competence in Tourism Britain International of Linguistics, Arts and Education, 1(2) 135-141
Dell’Ariccia, G. (1999). Exchange rate fluctuations and trade flows: Evidence from the European Union. IMF Staff Papers, 46(3), 315–334.
Ethier, W. (1973). International trade and the forward exchange market. American Economic Review, 63, 494–503.
Feenstra, R., Gagnon, J., & Knetter, M. (1996). Market share and exchange rate pass-through in world automobile trade. Journal of International Economics, 40(1–2), 187–207.
Fidrmuc, J. (2009). Gravity models in integrated panels. Journal of Empirical Economy, 37(2), 435–446.
Franke, G. (1991). Exchange rate volatility and international trading strategy. Journal of International Money and Finance, 10, 292–307.
Gala, P. (2008). Real exchange rate levels and economic development: Theoretical analysis and econometric evidence. Cambridge Journal of Economics, 32(2), 1243–1272.
Hooy, C.-W., Law, S.-H., & Chan, T.-H. (2015). The impact of the Renminbi real exchange rate on ASEAN disaggregated exports to China. Journal of Economic Modelling, 4, 253–259.
Huchet-Bourdon, M., & Korinek, J. (2011). To what extent do exchange rates and their volatility affect trade? OECD Trade Policy Papers. 119. Organization for Economic Co-operation and Development, Paris.
International Monetary Fund. (2004). Exchange rate volatility and trade flows Some new evidence. Washington, DC: IMF.
International Monetary Fund (2015b). Exchange rates and trade: A disconnects. IMF Working Paper No. 2017-58. IMF. Washington, D.C.
Janice Janice, & Nagian Toni. (2020). The Effect of Net Profit Margin, Debt to Equity Ratio, and Return on Equity against Company Value in Food and Beverage Manufacturing Sub-sector Companies listed on the Indonesia Stock Exchange, Budapest International Research and Critics Institute 2(1) 522-530
Kearns, J., & Patel, N. (2016). Does the financial channel of exchange rate offset the trade channel? Bank of International Settlements Quarterly Review. Bank for International Settlements, Basel, Switzerland.
Koren, M., & Szeidl, A. (2003). Exchange Rate Uncertainty and Export Prices, mimeo. Harvard University.
Krugman, P. (1989). The case for stabilizing exchange rates. Oxford Review of Economic Policy, Oxford University Press. 5(3), 61–72.
Li Bing-quan, et.al. (2020). Analysis on Behavior Factors of Successful Entrepreneurship of College Students of Local University in Guangdong Province,): Britain International of Humanities and Social Sciences 2(1) 34-44.
Teresa Paulina et.al. (2020). the Effect of Accounting Information and Organizational Culture on Decision Making, Budapest International Research and Critics Institute 2(1) 522-530.
Published
2020-06-17
How to Cite
Israel O.E Idewele. (2020). Universal Exchange and Trade Rates. Konfrontasi: Jurnal Kultural, Ekonomi Dan Perubahan Sosial, 7(2), 158-167. https://doi.org/10.33258/konfrontasi2.v7i2.109