- ISSN :
- 1816-6873 (en ligne)
- DOI :
NB. No. 1 to No. 139 were released under the previous series title OECD Trade Policy Working Papers.
Trade Effects of Exchange Rates and their Volatility: Chile and New Zealand
- Date de publication
- 22 mars 2012
- Bibliographic information
Voir l'abstract /
This study examines the impact of exchange rates and their volatility on trade flows in two small, open economies – Chile and New Zealand – with three major trading partners, in two broadly defined sectors – agriculture on the one hand and manufacturing and mining on the other. It finds that exchange volatility impacts trade flows in the small, open economies more than was found for larger economies. Findings do not clearly indicate the direction of the impact, i.e. whether this volatility increases or decreases trade in all countries and sectors. Exchange rate levels, on the other hand, affect trade in both agriculture and manufacturing and mining sectors although their magnitude differs depending on the trading partner and sector. Moreover, this study indicates that a depreciation in the exchange rates in Chile and New Zealand would not lead to a strong change in their trade balances with three main trading partners across the board.
- exchange hedging, Chile, long-run effects, short-run effects, depreciation, exchange rates, New Zealand dollar, volatility, exchange rate appreciation, New Zealand, trade deficit, real exchange rates, trade, Chilean peso, currency movements, small open economies, GARCH volatility, trade in agriculture
- Classification JEL:
- F1: International Economics / Trade
- F31: International Economics / International Finance / Foreign Exchange
- O24: Economic Development, Technological Change, and Growth / Development Planning and Policy / Trade Policy; Factor Movement Policy; Foreign Exchange Policy
- Q17: Agricultural and Natural Resource Economics; Environmental and Ecological Economics / Agriculture / Agriculture in International Trade