Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy
The volatility of the exchange rate is commonplace for every open economies. If excessive, it would have severe implications for the country’s international trades. Using the ARDL and cointegration bound tests on quarterly data [2000:Q2–2022:Q3], the study empirically explore how exchange rate vola...
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| Format: | Article |
| Language: | English |
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EconJournals
2023-01-01
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| Series: | International Journal of Economics and Financial Issues |
| Subjects: | |
| Online Access: | http://www.econjournals.com/index.php/ijefi/article/view/13929 |
| _version_ | 1828021558278356992 |
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| author | Adedeji Daniel Gbadebo |
| author_facet | Adedeji Daniel Gbadebo |
| author_sort | Adedeji Daniel Gbadebo |
| collection | DOAJ |
| description |
The volatility of the exchange rate is commonplace for every open economies. If excessive, it would have severe implications for the country’s international trades. Using the ARDL and cointegration bound tests on quarterly data [2000:Q2–2022:Q3], the study empirically explore how exchange rate volatility and other macroeconomic variables impacts real exports and imports demands for Nigeria. The evidence identify cointegration and the trade’ parsimonious models disclose a negative as well as significant short run effects of the exchange rate volatility. The estimated convergence ECM regressions indicate that exchange rates volatility cause significant decline in real exports and imports in the long run. Under this circumstance, the study supposes measures that will curb fluctuations beyond economic fundamentals. In particular, monetary authority should expand periodic exchange rate intervention to curtail excessive swings. This should be maintained intuitively and regularly appraise to avoid creating any counter-productive response.
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| first_indexed | 2024-04-10T11:55:56Z |
| format | Article |
| id | doaj.art-76b58bc252034d46a4a4c6e30d8f8b3a |
| institution | Directory Open Access Journal |
| issn | 2146-4138 |
| language | English |
| last_indexed | 2024-04-10T11:55:56Z |
| publishDate | 2023-01-01 |
| publisher | EconJournals |
| record_format | Article |
| series | International Journal of Economics and Financial Issues |
| spelling | doaj.art-76b58bc252034d46a4a4c6e30d8f8b3a2023-02-15T16:16:49ZengEconJournalsInternational Journal of Economics and Financial Issues2146-41382023-01-0113110.32479/ijefi.13929Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy Adedeji Daniel Gbadebo0Department of Accounting Science, Walter Sisulu University, Mthatha, Eastern Cape, South Africa. The volatility of the exchange rate is commonplace for every open economies. If excessive, it would have severe implications for the country’s international trades. Using the ARDL and cointegration bound tests on quarterly data [2000:Q2–2022:Q3], the study empirically explore how exchange rate volatility and other macroeconomic variables impacts real exports and imports demands for Nigeria. The evidence identify cointegration and the trade’ parsimonious models disclose a negative as well as significant short run effects of the exchange rate volatility. The estimated convergence ECM regressions indicate that exchange rates volatility cause significant decline in real exports and imports in the long run. Under this circumstance, the study supposes measures that will curb fluctuations beyond economic fundamentals. In particular, monetary authority should expand periodic exchange rate intervention to curtail excessive swings. This should be maintained intuitively and regularly appraise to avoid creating any counter-productive response. http://www.econjournals.com/index.php/ijefi/article/view/13929Exchange rate volatility, International trade, ARDL model, Cointegration bound test, Parsimonious model |
| spellingShingle | Adedeji Daniel Gbadebo Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy International Journal of Economics and Financial Issues Exchange rate volatility, International trade, ARDL model, Cointegration bound test, Parsimonious model |
| title | Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy |
| title_full | Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy |
| title_fullStr | Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy |
| title_full_unstemmed | Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy |
| title_short | Does Exchange Rates Swings Affect Trade? Evidence from an Emerging Open Economy |
| title_sort | does exchange rates swings affect trade evidence from an emerging open economy |
| topic | Exchange rate volatility, International trade, ARDL model, Cointegration bound test, Parsimonious model |
| url | http://www.econjournals.com/index.php/ijefi/article/view/13929 |
| work_keys_str_mv | AT adedejidanielgbadebo doesexchangeratesswingsaffecttradeevidencefromanemergingopeneconomy |