Arbeitspapier
Are exchange rates less important for trade in a more globalized world? Evidence for the new EU members
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.
- Sprache
-
Englisch
- Erschienen in
-
Series: IES Working Paper ; No. 10/2020
- Klassifikation
-
Wirtschaft
Foreign Exchange
Current Account Adjustment; Short-term Capital Movements
- Thema
-
Balance of trade
exchange rates
global value chains
export sophistication
panel cointegration
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Fisera, Boris
Horváth, Roman
- Ereignis
-
Veröffentlichung
- (wer)
-
Charles University in Prague, Institute of Economic Studies (IES)
- (wo)
-
Prague
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Fisera, Boris
- Horváth, Roman
- Charles University in Prague, Institute of Economic Studies (IES)
Entstanden
- 2020
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