Exchange rate sensitivity of the USA-Singapore trade flows

Evidence from industry data

Mohsen Bahmani-Oskooee, Hanafiah Harvey

Research output: Contribution to journalArticle

2 Citations (Scopus)

Abstract

The Marshall-Lerner condition is a condition that is judged to assess the long-run effects of currency depreciation on the trade balance. It is obtained by estimating price elasticities of a country's demand for imports and rest of the world demand for its exports. When the analysis is extended to bilateral level between two countries using aggregate bilateral trade data or bilateral commodity data, due to lack of prices researchers directly relate inpayments and outpayments to the exchange rate in addition to scale variables. In this paper we try to determine the short-run and long-run effects of real depreciation of the dollar on inpayments of 141 US industries that export to Singapore and 59 US industries that import from Singapore. While we find that most industries are affected in the short-run. However, the short-run effects last into the long-run only in 45 exporting industries and 15 importing industries. Most of the affected industries are small.

Original languageEnglish (US)
Pages (from-to)152-179
Number of pages28
JournalInternational Journal of Trade and Global Markets
Volume8
Issue number2
DOIs
StatePublished - 2015

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Exchange rates
Industry
Trade flows
Industry data
Singapore
Short-run
Bilateral
Import
Price elasticity
Marshall-Lerner condition
Depreciation
Currency depreciation
Commodities
Exporting
Bilateral trade
Trade balance
Importing

All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)
  • Business and International Management

Cite this

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Exchange rate sensitivity of the USA-Singapore trade flows : Evidence from industry data. / Bahmani-Oskooee, Mohsen; Harvey, Hanafiah.

In: International Journal of Trade and Global Markets, Vol. 8, No. 2, 2015, p. 152-179.

Research output: Contribution to journalArticle

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