Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/27465 
Year of Publication: 
2008
Series/Report no.: 
Economics Discussion Papers No. 2008-29
Publisher: 
Kiel Institute for the World Economy (IfW), Kiel
Abstract: 
This study documents a quantitative analysis of exchange rate volatilities and misalignment in Uzbekistan for the period of 1994q3-2005q2. The results suggest that the real exchange rate volatility and misalignment have depressing effects on the volume of trade, mainly exports in Uzbekistan. The Government's currency rationing policy was lessening the volatility proving that the policy-induced changes in exchange rate has a stabilizing effect on trade flows. The implied elasticity for the most significant real exchange rate volatility coefficient is -0.20. Using a two-step Engle-Granger technique import demand and export supply price elasticities are computed. The results are consistent with the predictions from a number of previous studies, and in particular, the estimated exports price elasticity for Uzbek economy ranges from 1.65 to 1.84, while import demand price elasticity is between -0.78 and -0.83. At the same time, relatively lower elasticity during 'the currency rationing' period indicate that large devaluations, most likely, did not generate the expected improvements in the overall export performance.
Subjects: 
Real exchange rate
volatility
misalignment
trade flows
Uzbekistan
JEL: 
C32
F41
Creative Commons License: 
cc-by-nc Logo
Document Type: 
Working Paper

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