scholarly journals Integration of Financial Markets and National Price Levels: The Role of Exchange Rate Volatility

2008 ◽  
Author(s):  
Mathias Hoffmann ◽  
Peter Tillmann
Keyword(s):  
Exchange Rate ◽  
Financial Markets ◽  
Exchange Rate Volatility ◽  
Price Levels

scholarly journals Exchange Rate Volatility and Trade: External Exchange Rate Volatility Matters

2020 ◽  
Vol 11 (02) ◽  
pp. 2050006
Author(s):  
Cengiz Tunc ◽  
Senol Babuşçu ◽  
Adalet Hazar ◽  
M. Nihat Solakoglu
Keyword(s):  
Exchange Rate ◽  
World Bank ◽  
Global Financial Crisis ◽  
Exchange Rate Volatility ◽  
Depressing Effect ◽  
Promoting Effect ◽  
Bilateral Exchange ◽  
The World Bank ◽  
The Global Financial Crisis

We investigate the role of external exchange rate volatility in export in addition to the effect of bilateral exchange rate volatility using country-, sector-, and destination-specific detailed export data of the World Bank Exporter Dynamics Database. The results show that while the bilateral exchange rate volatility has a depressing effect on export, the external exchange rate volatility generates trade-promoting effect on export. However, the magnitude of the effect depends on trade intensity between countries. Furthermore, while the role of external exchange rate volatility diminished after the Global Financial Crisis, the effect of its volatility has become larger. Finally, external exchange rate volatility has a larger trade-promoting effect on export in the presence of high volatilities than the effect in the presence of low volatilities.

EXCHANGE RATE MISALIGNMENT AND ECONOMIC GROWTH: EVIDENCE FROM PAKISTAN'S RECENT FLOAT

2010 ◽  
Vol 55 (03) ◽  
pp. 471-489 ◽  
Author(s):  
MUHAMMAD ZAKARIA
Keyword(s):  
Exchange Rate ◽  
Financial Markets ◽  
Real Exchange Rate ◽  
Flexible Exchange Rate ◽  
Output Growth ◽  
Growth Equation ◽  
Rate Period ◽  
Exchange Rate Misalignment ◽  
Worker Democracy

The paper empirically evaluates growth effects of real exchange rate misalignments in Pakistan for the flexible exchange rate period (1983Q1 to 2005Q4). First, real exchange rate misalignment is calculated as the deviation of the actual real exchange rate from its equilibrium value. It is found that the actual real exchange rate in Pakistan remained undervalued. Second, using the GMM estimation technique, it is found that undervaluation of the Pak-rupee has improved output growth in Pakistan and this result is robust to alternative growth equation specifications. The results also stress the role of other factors in determining output growth rate; particularly, capital per worker, democracy, corruption, human capital and deeper financial markets have the theoretical predicted signs and are statistically significant.

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