## Who Captures Export Windfalls? Exchange Rates, Export Profitability, and National Saving under Dominant-Currency Pricing

_IMF Working Papers, January 16, 2026_

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## Bibliographic details
- Authors: Bas B. Bakker
- Published: January 16, 2026
- Series: IMF Working Papers
- DOI: https://doi.org/10.5089/9798229037204.001

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### Mechanism under dominant-currency pricing
- Under dominant-currency pricing—where many export prices are set in dollars—the real exchange rate allocates export windfalls between producers and consumers.
- When the real exchange rate is stable:
  - Rising dollar export revenues pass through nearly one-for-one into higher real local-currency export income, profits, and retained earnings.
- When the real exchange rate appreciates:
  - Part of the windfall accrues to consumers through cheaper imports, compressing exporters' margins.
- Implication: National saving should respond to real local-currency export income—the portion accruing to domestic producers—rather than to dollar receipts per se.

### Data and empirical strategy
- Panel structure: five-year panels for 42 economies over 1982–2022.
- Estimation focuses on the relationship between national saving and measures of export income denominated in dollars versus real local-currency export income.

### Key empirical findings and statistics
- The national saving rate rises by about 0.27 percentage points for each 1 percentage point of GDP increase in real local-currency export income.
- Dollar export income has no independent effect on national saving once the real local-currency measure is included.
- Case validations:
  - Peru versus Brazil during the commodity boom support the mechanism and its timing.
  - China’s post-WTO export surge validates the mechanism and timing.
  - Argentina's 2002 devaluation validates the mechanism and timing.
- Out-of-sample prediction:
  - A coefficient estimated from 41 countries predicts China's 9.7-percentage-point saving increase (2002–2007) with an error of just 0.1 point.

### Interpretation and broader implications
- These findings reinterpret the "global saving glut" as the aggregate outcome of export booms whose windfalls accrued disproportionately to high-saving producers when real exchange rates remained stable.
- Emphasizes the role of exchange-rate behavior in determining how export windfalls are distributed between domestic producers and consumers, and in turn how they affect national saving.

*Bas B. Bakker, "Who Captures Export Windfalls? Exchange Rates, Export Profitability, and National Saving under Dominant-Currency Pricing", IMF Working Paper No. 2026/009.*

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