Exchange Rates and Trade Balance Adjustment in Emerging Market Economies

Date: October 10, 2006
Electronic Access: Full text

Summary:The paper finds that simple econometric specifications yield surprising rich and complex dynamics -- relative prices respond to the nominal exchange rate and pass-through effects, import and export volumes respond to relative price changes, and the trade balance responds to changes in import and export values.

Series : Policy Paper
Notes: The views expressed in this paper are those of the staff and do not necessarily reflect the views of the Executive Board of the IMF.