Impact of Macroeconomic Fundamentals on Exchange Rates: Empirical Evidence from Developing Asian Countries

2015 ◽  
Author(s):  
Fayyaz Ahmad ◽  
Muhammad Umar Draz ◽  
Su-chang Yang
Keyword(s):  
Exchange Rates ◽  
Empirical Evidence ◽  
Asian Countries ◽  
Macroeconomic Fundamentals

scholarly journals Can Information Heterogeneity Explain the Exchange Rate Determination Puzzle?

2006 ◽  
Vol 96 (3) ◽  
pp. 552-576 ◽  
Author(s):  
Philippe Bacchetta ◽  
Eric van Wincoop
Keyword(s):  
Exchange Rate ◽  
Empirical Evidence ◽  
Rational Expectations ◽  
Exchange Rate Volatility ◽  
Order Flow ◽  
Macroeconomic Variables ◽  
Symmetric Information ◽  
Macroeconomic Fundamentals ◽  
The Exchange Rate ◽  
Exchange Rate Changes

Empirical evidence shows that most exchange rate volatility at short to medium horizons is related to order flow and not to macroeconomic variables. We introduce symmetric information dispersion about future macroeconomic fundamentals in a dynamic rational expectations model in order to explain these stylized facts. Consistent with the evidence, the model implies that (a) observed fundamentals account for little of exchange rate volatility in the short to medium run, (b) over long horizons, the exchange rate is closely related to observed fundamentals, (c) exchange rate changes are a weak predictor of future fundamentals, and (d) the exchange rate is closely related to order flow.

scholarly journals Nexus of Terrorism and Tourism: Empirical evidence from South Asian Countries

2021 ◽  
Vol 28 (1) ◽  
pp. 1-12
Author(s):  
Tafazal Kumail ◽  
Wajahat Ali ◽  
Farah Sadiq ◽  
Asif Khan
Keyword(s):  
Empirical Evidence ◽  
South Asian ◽  
Asian Countries

scholarly journals Third-Country Effects on the Market Shares of U.S. Wheat in Asian Countries

2004 ◽  
Vol 36 (3) ◽  
pp. 797-813 ◽  
Author(s):  
Hyun J. Jin ◽  
Guedae Cho ◽  
Won W. Koo
Keyword(s):  
Exchange Rates ◽  
Import Demand ◽  
Demand Model ◽  
Asian Countries ◽  
Panel Estimation ◽  
Explanatory Variables ◽  
Market Shares ◽  
Australian Wheat ◽  
The U.S ◽  
Country Effect

An import demand model, augmented with third-country effect variables, is developed to examine the effects of strong U.S. dollar, volatility of the U.S. dollar, and competition among the exporting countries on the shares of U.S. wheat in Asian markets. In the empirical model, the dependent variable is the market shares of U.S. wheat. Explanatory variables include wheat prices of exporting countries, exchange rates between the importing and exporting countries, and volatilities of the exchange rates. Panel estimation results show that the U.S. currency value and volatility, Australian wheat price, and the volatilities of Canadian and Australian currency values have significant effects on U.S. market shares.

scholarly journals International Trade and Foreign Direct Investment: Substitutes or Complements?

2002 ◽  
Vol 34 (2) ◽  
pp. 289-302 ◽  
Author(s):  
Mary A. Marchant ◽  
Dyana N. Cornell ◽  
Won Koo
Keyword(s):  
Foreign Direct Investment ◽  
Exchange Rates ◽  
Interest Rates ◽  
Direct Investment ◽  
East Asian ◽  
Agricultural Trade ◽  
Processed Foods ◽  
Asian Countries ◽  
Critical Question ◽  
Simultaneous Equation System

International agricultural trade has evolved over time. Processed foods and developing countries have become major growth markets for U.S. agricultural exports, and foreign direct investment (FDI) has become even more important than exports as a means of accessing foreign markets. The critical question is whether FDI is a substitute for or a complement of exports. This research builds upon an existing theoretical FDI model and contributes to the literature through the development of a simultaneous equation system for FDI and exports, which is estimated using two-stage least squares. Empirical analyses were used to examine the relationship between U.S. FDI and exports of processed foods into East Asian countries-China, Japan, Singapore, South Korea, and Taiwan-from 1989 to 1998. The results indicated a complementary relationship between FDI and exports. Additionally, these results indicated that interest rates, exchange rates, gross domestic product (GDP), and compensation rates are important variables that influence U.S. FDI in East Asian countries, while GDP, exchange rates, and export prices are important export determinants.

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