Shock-Dependent Exchange Rate Pass-Through: Evidence Based on a Narrative Sign Approach

An, Lian; Wynne, Mark A.; Zhang, Ren

doi:10.24149/gwp379

Cited by 8 publications

(5 citation statements)

References 58 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…The first assumption is the random sampling of the treatment group. We think this assumption is satisfied due to the following reasons: (1) according to Huang [56], the BRI, as an open initiative to revive the ancient Silk Road, is more limited in geographical coverage than many of the existing international arrangements, so that the countries involved in the BRI are determined primarily by their geographical location in the history; (2) just as Zhang et al [24] and Yu et al [43] point out, many regions along the Belt-Road route such as the Middle East and South Asia are unstable and crisis-prone, which is not conducive to FDI or infrastructure investment. What is more, some neighboring countries do not trust China [5] and could even become future potential rivals in international affairs [43].…”

Section: Model Specificationsmentioning

confidence: 99%

“…For example, Brülhart and Thorpe [21] find that the increase in "two-way" trade among the East Asian economies reduces the labor market adjustment costs and, hence, reduces the trade friction between nations and has led to the extraordinary growth in exports from the 1970s to the mid−1990s. (3) Trade integration encourages the reallocation of resources to more efficient activities and thus opens up opportunities and boosts demands and employment [22][23][24]. This is particularly important within the context of the foreseeable global economic adversity caused by the Covid−19 pandemic.…”

Section: Introductionmentioning

confidence: 99%

See 1 more Smart Citation

Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?

Ren

et al. 2020

Sustainability

View full text Add to dashboard Cite

The Belt and Road Initiative (BRI) is designed to intensify reciprocal trade preferentiality between China and the Belt-Road countries. However, there has been little research empirically examining the policy effects on the trade links between China and the involved countries. This paper attempts to evaluate the BRI effects quantitatively by constructing a new bilateral revealed trade preference index to measure the bilateral trade preferentiality between China and its 114 trading partners. Using a difference in differences model, we show that the trade of China with the Belt-Road countries has become more preferentially linked since the implementation of the BRI. In particular, the bilateral revealed trade preference index between China and the Belt-Road countries has grown approximately 8% faster than has that with the non-Belt-Road countries. We further show that the BRI effects are heterogeneous across different regions. The bilateral trade links have been more significantly intensified in the regions of the China–Indochina Peninsula Economic Corridor, the China–Pakistan Economic Corridor, the China–Central Asia–West Asia Economic Corridor and the Bangladesh–China–India–Myanmar Economic Corridor. The findings strongly indicate that BRI has been acting as a catalyst for intensifying bilateral trade preferentiality between China and the Belt-Road countries.

show abstract

Section: Model Specificationsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?

Ren

et al. 2020

Sustainability

View full text Add to dashboard Cite

show abstract

“…Economic activities are easily affected by various social factors, such as monetary policies (Balke et al, 2017;Zhang, 2019;An et al, 2021), credit shocks (Balke et al, 2021), and major public events like COVID-19 pandemic (Shang et al, 2021;Zhao Y. H. et al, 2021). The global economy encountered a serious recession in the second quarter of 2020.…”

Section: Overview Of the Effect Of Covid-19 On Economic And Mental He...mentioning

confidence: 99%

COVID-19 Induced Economic Slowdown and Mental Health Issues

et al. 2022

View full text Add to dashboard Cite

The COVID-19 pandemic has pressed a pause button on global economic development, and induced significant mental health problems. In order to demonstrate the progressed relationship between the pandemic, economic slowdown, and mental health burden, we overviewed the global-level gross domestic product changes and mental problems variation since the outbreak of COVID-19, and reviewed comprehensively the specific sectors influenced by the pandemic, including international trade, worldwide travel, education system, healthcare system, and individual employment. We hope to provide timely evidence to help with the promotion of policymakers’ effective strategies in mitigating economic losses induced by the pandemic; we suggest different governments or policy makers in different countries to share information and experience in dealing with COVID-19-induced economic slowdown and promote COVID-19 vaccine popularization plan to protect every individual worldwide against the coronavirus essentially; and we appeal international information share and collaboration to minimize stigmatization related to adverse mental consequences of COVID-19 and to increase mental health wellbeings of people all over the world.

show abstract

“…There is a growing literature in this area of shock dependent ERPT in the recent years. Studies for specific countries or group of countries have emerged as Comunale and Kunovac (2017) do for euro area members, Corbo (2018) for Sweden, An, Wynne, et al (2020) for Japan. It is interesting to note that all of those papers employ the VAR with sign restriction approach since this methodology facilitates the identification of the source of the shock.…”

Section: Introductionmentioning

confidence: 99%

Shock Dependent Exchange Rate Pass-Through - An Analysis for Latin American Countries

Rossi,

Costa

2023

View full text Add to dashboard Cite

This paper investigates the exchange rate pass through considering the source of the shocks that hit the economy. With a Bayesian Global VAR model, the exchange rate pass-through is analyzed for 5 Latin American countries: Brazil, Chile, Colombia, Mexico and Peru. The model is estimated with Bayesian techniques and is identified by sign and zero restrictions. The BGVAR estimation enable us to allow spillover between countries mimicking the real conditions when the shocks hit the economies. Four domestic shocks for each Latin American countries are considered: an exchange rate shock, a risk premium shock, a monetary policy shock and a demand shock. The demand shock has the highest exchange rate pass-through for all the countries and the exchange rate shock has the lowest one. Additionally, two regional shocks are considered: a regional monetary policy shock, an event that all the region rises its interest rate and a regional risk premium shock, where the risk premium rises at the same time. For almost of the countries, the exchange rate pass-through coming from those regional shocks are lower than its domestic counterpart shock. Finally, we investigate two global shocks, an uncertainty shock and a global commodities/demand shock. The uncertainty shock decreases the economic activity and depreciates the exchange rate with a negative exchange rate pass-through in the middle term. The commodities/demand shock increases the economic activity and appreciates the exchange rate passthrough, having a negative or neutral exchange rate pass-through over the time.

show abstract

Shock-Dependent Exchange Rate Pass-Through: Evidence Based on a Narrative Sign Approach

Cited by 8 publications

References 58 publications

Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?

Has China’s Belt and Road Initiative Intensified Bilateral Trade Links between China and the Involved Countries?

COVID-19 Induced Economic Slowdown and Mental Health Issues

Shock Dependent Exchange Rate Pass-Through - An Analysis for Latin American Countries

Contact Info

Product

Resources

About