Home

    About

    Open Access Repository

    SearchBrowse by ThemeBrowse by AuthorBrowse by TypeMost Popular Titles

    Other Resources

    Curators

    Events

    Contributing Think Tanks

    Networks

    Using Content

    FAQs

    Terms of Use

    11,500+ curated items from top Think Tanks.
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Home

    About

    Open Access Repository

    SearchBrowse by ThemeBrowse by AuthorBrowse by TypeMost Popular Titles

    Other Resources

    Curators

    Events

    Contributing Think Tanks

    Networks

    Using Content

    FAQs

    Terms of Use

    Exchange Rates, International Trade and Growth: Re-Evaluation of Undervaluation

    Sokolova, Maria V. | March 2017
    Abstract
    This paper shows that regional trade integration shifts the burden of the exchange rate adjustment towards the less integrated trading partners. Thus, they bear the cost of trade balance expansion, while competitive exchange rate moves vis- a-vis RTA trading partners result in no expansion or deterioration of the overall trade balance. First, using the data on 138 countries since 1990 that have been envolved in regional trade integration through signing regional trade agreements (RTAs), this paper shows that upon a 10% depreciation towards non-RTA trading partners results in a 4.4% improvement of the aggregate trade balance. A similar competitive depreciation towards RTA trading partners has resulted on average 3.7% deterioration of the aggregate trade balance. Second, I con rm that RTA participation can act as a good proxy for trade integration, and test the results with alternative measures of trade balance. Third, I use a simple model frame- work based on the current account adjustments to put the empirical findings into the theoretical frame. Altogether, this paper indicates that regional trade integration in the form of RTA should be taken into account in questions related to the competitive exchange rate e ects and trade balance adjustment.
    Citation
    Sokolova, Maria V.. 2017. Exchange Rates, International Trade and Growth: Re-Evaluation of Undervaluation. © Asian Development Bank Institute. http://hdl.handle.net/11540/7617.
    Keywords
    Government Policy
    Regional Organization
    Regional Plans
    Economic integration
    Regional Development Bank
    Preferential tariffs
    International negotiation
    Protectionist measures
    Access to markets
    Economic agreements
    International trade law
    Regional integration
    Trade relations
    Regionalism
    Regional Economy
    Regional Trading Arrangements
    Regional Trade Integration
    Regional Economic Integration
    Regional Cooperation
    Interregional Cooperation
    Trade Disputes
    Trade Barriers
    Regional economics
    Regional planning
    Regional disparities
    Interregionalism
    Regional economic disparities
    Regional economic blocs
    Industrial arbitration
    Show allCollapse
    Citable URI
    http://hdl.handle.net/11540/7617
    Metadata
    Show full item record
    Thumbnail
    adbi-wp684.pdf (736.0Kb)
    Author
    Sokolova, Maria V.
    Theme
    Regional
    Trade
     
    Copyright 2016-2020 Asian Development Bank Institute, except as explicitly marked otherwise
    Copyright 2016-2020 Asian Development Bank Institute, except as explicitly marked otherwise