Effective Trade Costs and the Current Account: An Empirical Analysis

2019 ◽  
Author(s):  
Emine Boz ◽  
Nan Li ◽  
Hongrui Zhang
Keyword(s):  
Empirical Analysis ◽  
Current Account ◽  
Trade Costs ◽  
The Current Account

scholarly journals Empirical analysis of merchandise trade deficit and the current account in Lebanon

2019 ◽  
Vol 20 (1) ◽  
pp. 173-192 ◽  
Author(s):  
S. Azar ◽  
◽  
A. Bolbol ◽  
H. Hakimian ◽  
A. Mouradian ◽  
...  
Keyword(s):  
Empirical Analysis ◽  
Current Account ◽  
Real Exchange Rates ◽  
Trade Deficit ◽  
Policy Implications ◽  
Public Expenditures ◽  
Strong Basis ◽  
Domestic Production ◽  
Merchandise Trade ◽  
The Current Account

The paper provides an empirical analysis of Lebanon’s merchandise trade deficit and thecurrent accountfor the 1969-2016 period. Using the Auto-Regressive Distributed Lag approach, it estimatesstandard demand functions for merchandise exports and imports and the trade deficit.The results show that real exchange rates do not have a long-run impact on exports, imports, the trade deficit, and the current account; domestic production has a notableeffect on reducing trade deficits while absorption expenditures, primarily public expenditures, have a strong effect on increasing trade deficits. The main three conclusions and policy implications that emerge from the analysis are: first, the Central Bank of Lebanon’s policy of fixing the exchange rate in the post-war period has not harmed competitiveness and has proved to be a strong basis for monetary stability; second, a more active industrial and investment policy is needed to enhance competitiveness and export promotion and to increase and diversify domestic production; and third, public expenditures ought to be urgently rationalized and conducted within a framework of sound fiscal and governance reforms.

scholarly journals Effective Trade Costs and the Current Account

2019 ◽  
Vol 19 (8) ◽  
pp. 1 ◽  
Author(s):  
Emine Boz ◽  
Nan Li ◽  
Hongrui Zhang
Keyword(s):  
Current Account ◽  
Trade Costs ◽  
The Current Account

scholarly journals Importance of the Debt-Adjusted Real Exchange Rate in the Eurozone and V4

2017 ◽  
Vol 65 (4) ◽  
pp. 1325-1337
Author(s):  
Patrik Abrahámek
Keyword(s):  
Exchange Rate ◽  
Real Exchange Rate ◽  
Empirical Analysis ◽  
Monetary Union ◽  
Current Account ◽  
Purchasing Power Parity ◽  
External Imbalances ◽  
The Us ◽  
Us Dollar ◽  
The Current Account

The purpose of this paper is to determine a potential overvaluation and undervaluation of currencies of selected eurozone countries and of the Visegrád Four. The DARER (Debt-Adjusted Real Exchange Rate) model was used for an empirical analysis of the period between 2010–2014 in individual quarters. The advantage of this model is that it explicitly takes into consideration the development of the current account and the debt of the country in connection with the theory of purchasing power parity. The DARER model appears to be a suitable tool for the empirical analysis because, currently, there are many countries in the eurozone with a high debt. In the analysis, data on the current account, debt service payments, GDP, HICP USA and individual researched countries, the exchange rates EUR/USD and CZK/USD, PLN/USD, HUF/USD were used. According to the average overvaluation and undervaluation of currency in all observed states in the Eurozone, in total the overvaluation of the euro against the US dollar was 19.3 %. The overvaluation in individual countries varied from 6.3 % to 33.38 %. These differences in the overvaluation of states’ currency against the US dollar were caused mainly by different development of the balance of payments of the country and the country’s debt. This can indicate various levels of external imbalances among the states within the monetary union. According to the result of this research, the DARER model was able to identify varying overvaluation and undervaluation of currencies in individual eurozone states and the Visegrád Group, so it can be used by policy makers as one of the indicators of these external imbalances of individual countries in the monetary union.

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