On the trade impact of nominal exchange rate volatility
Abstract: What is the effect of nominal exchange rate variability on trade? I argue that the methods conventionally used to answer this perennial question are plagued by a variety of sources of systematic bias. I propose a novel approach that simultaneously addresses all of these biases, and present new estimates from a broad sample of countries from 1970 to 1997. The answer to the question is: Not much.
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Provider: Federal Reserve Bank of Boston
Part of Series: Working Papers
Publication Date: 2003