Commercial policy, the terms of trade and the real exchange rate revisited

Devereux, John; Connolly, Michael

doi:10.1016/0304-3878(96)00004-1

Cited by 27 publications

(25 citation statements)

References 33 publications

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“…Among the studies dealing with the relationship between trade openness and the REER, we can mention Devereux and Connolly's (1996), which found that import taxes (protection) appreciate the REER in a sample of Latin American countries, supporting the hypothesis that liberalizing trade produces a depreciation of the REER. Moreover, Li (2004) has also found that, consistently with theoretical expectations, the REER depreciates after trade liberalization, but his study shows that partial or incomplete liberalization policies do not produce this effect.…”

Section: Trade Opennessmentioning

confidence: 62%

Does trade openness influence the real effective exchange rate? New evidence from panel time-series

Gantman

Dabós

2017

SERIEs

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Using a dataset of 101 countries over the 1960-2011 period, we examine the relationship between the real effective exchange rate (REER), on the one hand, and trade openness, trade balance, the terms of trade, factor productivity, and exchange rate regime, on the other one. We use new econometric estimators that deal with the problems of potential endogeneity and cross-sectional dependence that are present in the data, while also allowing for cross-country heterogeneity in the parameters of interest. The findings of the study strongly support the hypothesis that an increase in trade openness produces a depreciation of the REER. The other variables considered in the analysis-factor productivity, trade balance, terms of trade, and exchange rate regime-do not have a statistically significant effect that is robust to different sample compositions and alternative statistical estimators.

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Section: Trade Opennessmentioning

confidence: 62%

Does trade openness influence the real effective exchange rate? New evidence from panel time-series

Gantman

Dabós

2017

SERIEs

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“…For a recent study on commercial policy, the real exchange rate, and non-traded goods 8 that uses an approach similar to the one in this paper, see Devereux and Connolly (1996).…”

Section: Nn MMmentioning

confidence: 99%

Tariff Incidence in America's Gilded Age

Irwin

2007

J. Econ. Hist.

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In the late nineteenth century, the United States imposed high tariffs to protect domestic manufacturers from foreign competition. This paper examines the magnitude of protection given to import-competing producers and the costs imposed on export-oriented producers by focusing on changes in the domestic prices of traded goods relative to non-traded goods. Because the tariffs tended to increase the prices of non-traded goods, the degree of protection was much less than indicated by nominal rates of protection; the results here suggest that the 30 percent average tariff on imports yielded about a 17 percent implicit subsidy to import-competing producers while effectively taxing exporters at a rate of about 10 percent. The paper also finds that tariff policy redistributed large amounts of income (about 8 percent of GDP) across groups, although the impact on consumers was only slightly negative because they devoted a sizeable share of their expenditures to exportable goods. These findings may explain why import-competing producers pressed for even greater protection in the face of already high tariffs and why consumers (as voters) did not strongly oppose the policy.

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“…Five of the nine studies are considers Latin America economies (Conejo and Shields, 1993;Seabra, 1995;Calvo, Reinhart and Vegh, 1995;Devereux and Connolly, 1996;Filho, 1999), one of them (Soofi, 1998) Moreover, it is seen that all the studies cover 25 years or less, except Conejo and Shield (1993) that covers 41 years and uses annual data, and Filho (1999) that employs 135 years more than a century of data. Therefore, mostly quarterly and in one case (Soofi, 1998) monthly data are used to improve the power of the tests.…”

Section: Empirical Literature On Purchasing Power Parity Hypothesis Fmentioning

confidence: 99%

“…Furthermore, six of the nine studies apply CPI index other than Seabra (1995) and Devereux and Connolly (1996) who employ the mixed price ratio of both CPI and WPI. For comparison reason, Conejo and Shields (1993) considers also WPI series.…”

Section: Empirical Literature On Purchasing Power Parity Hypothesis Fmentioning

confidence: 99%

“…[insert Table 4] The following nine studies are considered in Table 4: Conejo and Shields, 1993;Seabra, 1995;Bahmani-Oskooee, 1995;Calvo, Reinhart and Vegh, 1995;Devereux and Connolly, 1996;Soofi, 1998;Filho, 1999;Razzaghipour, Fleming and Heaney, 2000;Holmes, 2000. The period and type of data, region of countries, type of price index and exchange rate series, exchange rate regime periods, specific version of PPP and econometric techniques are summarized in Table 4.…”

Section: Empirical Literature On Purchasing Power Parity Hypothesis Fmentioning

confidence: 99%

See 1 more Smart Citation

Econometric testing of purchasing power parity in less developed countries: fixed and flexible exchange rate regime experiences

Sülkü

2010

Applied Economics

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Commercial policy, the terms of trade and the real exchange rate revisited

Cited by 27 publications

References 33 publications

Does trade openness influence the real effective exchange rate? New evidence from panel time-series

Does trade openness influence the real effective exchange rate? New evidence from panel time-series

Tariff Incidence in America's Gilded Age

Econometric testing of purchasing power parity in less developed countries: fixed and flexible exchange rate regime experiences

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