Detail publikace

Are Exchange Rates Less Important for Trade in a More Globalized World? Evidence for the New EU Members

Autor: Ing. Boris Fišera ,
prof. Roman Horváth Ph.D.,
Typ: IES Working Papers
Rok: 2020
Číslo: 10
ISSN / ISBN:
Publikováno v: IES Working Papers 10/2020
Místo vydání: Prague
Klíčová slova: Balance of trade, exchange rates, global value chains, export sophistication, panel cointegration
JEL kódy: F31, F32
Citace: Fisera B. and Horvath R. (2020): "Are Exchange Rates Less Important for Trade in a More Globalized World? Evidence for the New EU Members" IES Working Papers 10/2020. IES FSV. Charles University
Abstrakt: We evaluate the effect of exchange rate misalignments on the balance of trade and the role that global value chain participation plays in this effect for 11 new European Union member states. Using heterogeneous panel cointegration methods, we first estimate the real equilibrium exchange rate and detect episodes of currency misalignment. We find asymmetric effects of real currency misalignments: overvaluation has a negative effect, but undervaluation has no effect on the trade balance. Additionally, we find that global value chain participation weakens the effect of currency misalignments on the balance of trade. Therefore, our results suggest that
globalization reduces the role of exchange rates in stimulating the domestic economy.
Ke stažení: wp_2020_10_fisera_horvath
Červenec 2020
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