Exchange-rate volatility, international trade, and resource allocation: A perspective on recent research

Willett, Thomas D.

doi:10.1016/0261-5606(86)90023-9

Cited by 56 publications

(28 citation statements)

References 7 publications

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“…1983 196319651967196919711973 1975 1977 1979 1981 198 1%1 1969197111131975197119611963YE GUATEL&IA 19631965196719691971197319751971197911811183 19631965196719691911117319751111197919611963 yw 19631965196119691971 197319751971 Tables 2 and 3 In order to further investigate RER behavior, linear trends regressions were estimated for four time periods : 1965-1985, 1965-1971, 1972-1985 An important finding on RER behavior reported in the previous section refers to the increased degree of volatility experienced by RERs. From a theoretical perspective it has been well established that real exchange rate disequilibrium and heightened uncertainty regarding RER behavior will have negative effects on economic performance (Willet, 1986). Empirically, however, there has been more difficulty finding evidence that supports these theoretical insights.…”

Section: Brer2 -E Cpimentioning

confidence: 84%

Real Exchange Rates in the Developing Countries: Concepts and Measure- ment

Edwards

1989

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This paper deals with three important issues related to real exchange rates. First, it discusses the analytical concept of real exchange rate (RER) placing particular emphasis on providing an operational definition for the equilibrium real exchange rate. Of course, once this concept is defined we can begin to discuss in a meaningful way what we mean by real exchange rate misalignment, or deviations of the actual RER from its equilibrium value. Second, this paper deals with problems associated with measuring real exchange rates. Several proposals are analyzed and the more serious problems encountered when attempting to compute RER's in the developing countries are discussed. And third, I analyze the actual behavior of RER's in a number of developing countries. Here, issues related to the behavior of alternative indexes and to the statistical properties of real exchange rates are emphasized. Additionally, I study the real consequences of increased real exchange rate volatility.

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Section: Brer2 -E Cpimentioning

confidence: 84%

Real Exchange Rates in the Developing Countries: Concepts and Measure- ment

Edwards

1989

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“…Using the assetmarket approach Dellas and Zilberfarb (1993) provide additional evidence for the ambiguous trade effect of instability. Willett (1986) analysed the risk of instability in the exchange rate to specific industries and found that instability can have a negative, a positive or no effect on trade. Dhanani and Groves (2001) developed models to illustrate that volatility in exchange rates has an ambiguous effect on the volume of international trade.…”

Section: Introductionmentioning

confidence: 99%

Does exchange rate volatility discourage international trade? A meta-regression analysis

Haile

Pugh

2013

The Journal of International Trade & Economic Development

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Since the breakdown of the Bretton Woods agreement, the trade effect of exchange rate variability (ERV) has been contentious. However, neither the theoretical nor the empirical literature provides unambiguous guidance on the trade effect of ERV. This article applies metaregression analysis to the empirical literature and finds evidence of: modest publication bias; a range of authentic empirical effects that are highly conditional, even with respect to sign and, correspondingly, pronounced heterogeneity in the reported results. Investigation of this heterogeneity reveals that the results are significantly influenced both by authors' modelling strategies and by the contexts of their investigations. In particular, researchers are most likely to find an adverse trade effect by investigating low-frequency real exchange variability and trade between less developed economies, hence, beyond the reach of hedging opportunities (as suggested by previous studies). In general, our most important advice for policy makers is that economic research does not reveal a single representative effect size.

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“…Austrians have left the initiative in these fields to others (though not much has so far been done on the second subject, except for attempts to quantify the impact of exchange rate variability on trade flows, cf. Exchange Rate Volatility and World Trade 1984, Cushman 1986, Willett 1986. Austrian interest has always been more focused on monetary problems.…”

Section: Resultsmentioning

confidence: 99%

Austrian Thinking on International Economics

Visser¹

1988

Journal of Economic Studies

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The epithet “Austrian” in “Austrian economics” is applied to the work of economists as far apart in time as Carl Menger, whose Grundsätze der Volkswirthschaftslehre (Principles of Political Economy) first appeared in 1871, and Ludwig Lachmann, Israel Kirzner and Murray Rothbard, writing a century or more later. It would be vain to attempt to define Austrian economics by a set of beliefs, commonly held by its adherents. There is much to be said for following Zuidema (1987), who prefers to speak of “styles” rather than “schools”. This implies that there need be no clear‐cut dividing lines between Austrians and the rest of the economics fraternity and that not all those dubbed “Austrian” are necessarily “typically” Austrian all of the time. There certainly seems to be a style of reasoning that can be seen as specifically Austrian. Some of the components of a “style” mentioned by Zuidema are:

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Exchange-rate volatility, international trade, and resource allocation: A perspective on recent research

Cited by 56 publications

References 7 publications

Real Exchange Rates in the Developing Countries: Concepts and Measure- ment

Real Exchange Rates in the Developing Countries: Concepts and Measure- ment

Does exchange rate volatility discourage international trade? A meta-regression analysis

Austrian Thinking on International Economics

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