Consequences of choosing the exchange rate regime on International trade

Abstract

In the context of significant global economic turmoil and increasing financial, political and social risks leading to a decrease in aggregate demand worldwide and beyond, external competitiveness becomes a key variable in terms of the resumption of economic growth in Romania as integrated process in the aggregate evolution of the European economy. This paper aims to analyze the link between the exchange rate regime and international trade, in order to demonstrate whether there is an influence of the choice of exchange rate regime on the volume of trade. It also analyzes the influence of exchange rate volatility on international trade. The objectives of this research were: knowing the options for choosing an exchange rate regime; distinguishing the factors that determine the choice of an exchange rate regime; understanding the theories presented on exchange rate regimes; analysis of the impact of choosing an exchange rate regime in the countries of Central and South-Eastern Europe All data used in the paper were collected from articles, reports, summaries, statistics, books, but also official sites such as the International Monetary Fund or the Eurostat website. The data used were selected after deepening and understanding the ideas underlying the choice and influences of exchange rate regimes.