The Influence of Real Exchanges Rate Volatility In Trade (Comparative Study on Developing Countries with Various Structures of Production and Trade)
2009, Volume 31, Issue 96, Pages 191-203
This study discusses the influence of volatility of exchange rate in trade. These subjects became a fertile field for several studies that confined themselves in the negative influence hypothesis of exchange rate volatility in trade, and tried to enhance it without careful studying. For this reason, the study has great importance; it seeks to avoid testing this hypothesis. The research aims to study the influence of exchange rate volatility in two trade groups in the developing countries. The first includes countries with a various structures of trade and production, while the second group countries with less variable trade and production structures. The hypothesis of the research is summarized in that the response of trade to the volatility of exchange rate in the countries with the various trade and production structures is more than its response in the countries with less various trade and production structures. The research used the theoretical analysis manner, which is enhanced by several views of researchers in this field, in addition to the use of the statistical methods in explaining these relations. The research concluded a number of results, the most important among them were that there is a tight relation between exchange rate volatility and trade in the developing countries with various structures of trade and production, while there is no relation in the second group of countries, and this has enhanced the hypothesis of the research.
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