Policy Papers

Exchange Rates and Trade Balance Adjustment in Emerging Market Economies

October 10, 2006

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Exchange Rates and Trade Balance Adjustment in Emerging Market Economies, (USA: International Monetary Fund, 0) accessed November 21, 2024

Summary

The paper finds that simple econometric specifications yield surprising rich and complex dynamics -- relative prices respond to the nominal exchange rate and pass-through effects, import and export volumes respond to relative price changes, and the trade balance responds to changes in import and export values.

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Notes

The views expressed in this paper are those of the staff and do not necessarily reflect the views of the Executive Board of the IMF.