Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/314041 
Year of Publication: 
2018
Citation: 
[Journal:] Journal of Applied Economics [ISSN:] 1667-6726 [Volume:] 21 [Issue:] 1 [Year:] 2018 [Pages:] 84-105
Publisher: 
Taylor & Francis, Abingdon
Abstract: 
This paper analyzes the link between international trade and exchange rate levels in the context of the global financial crisis (GFC) and the rise of global and regional value chains (GVCs). Using bilateral data for 72 economies over the 2001-2015 period, we find a positive relationship between the real exchange rate and export volume pre-GFC; but this relationship mostly disappears post-GFC. We also examine the impact of deepening GVCs on trade and on the exchange rate-trade link channel. The analysis confirms that increased participation in GVCs lowers the impact of the exchange rate on exports, and could be a contributing factor to weakening links between exchange rates and trade. Lastly, other structural factors, such as import composition and stock of short-term external debt of exporters and importers, seem to have a significant impact on trade performance but less impact on the exchange rate-trade link channel post-GFC.
Subjects: 
global value chains
gravity model
real exchange rate
Trade volume
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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