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N° 89-90 |
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| Issue 1-2 2002 |
| Exchange Rate Volatility
as a Barrier to Trade: New Methodologies and Recent Evidence |
| Daria Taglioni |
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| The analysis of the border effect in a multi-currency framework reveals that volatility accounts for an important part of the border effect in Europe. This paper proposes an explanation of why this methodology yields robust results of the negative effects of volatility on trade, contrary to a three decades-old literature that is characterised by weak and controversial results. The paper maintains that empirical studies carried out at the level of sub-national units and at the finest industry echelon help clarify the actual influence of exchange rate volatility on trade better than aggregate and purely international analyses. |
Abstract
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| Exchange Rate
Volatility, Trade, Gravity, Border, Sector |
Keywords |
| F12; F15; F17 |
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