Exchange Rates and Trade : A Disconnect?

Author/Editor:

Daniel Leigh ; Weicheng Lian ; Marcos Poplawski-Ribeiro ; Rachel Szymanski ; Viktor Tsyrennikov ; Hong Yang

Publication Date:

March 15, 2017

Electronic Access:

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Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary:

We examine the stability and strength of the relationship between exchange rates and trade over time using three alternative approaches, mitigating the endogeneity of the relation. We find that both exchange rate pass-through and the price elasticity of trade volumes are largely stable over time. Economic slack and financial conditions affect the relationship, but there is limited evidence that participation in global value chains has significantly changed the exchange rate–trade relationship over time.

Series:

Working Paper No. 17/58

Subject:

English

Publication Date:

March 15, 2017

ISBN/ISSN:

9781475587494/1018-5941

Stock No:

WPIEA2017058

Price:

$18.00 (Academic Rate:$18.00)

Format:

Paper

Pages:

52

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