Exchange rate volatility and Spanish-American commodity trade flows

Mohsen Bahmani-Oskooee, Hanafiah Harvey, Scott W. Hegerty

Research output: Contribution to journalArticle

5 Scopus citations

Abstract

A number of recent studies have tested the impact of exchange rate volatility on trade flows, particularly for individual commodities, for various country pairs. These have found that risk can increase as well as decrease trade, but that oftentimes industries are not affected. This study examines trade between the United States and Spain over the period from 1962 to 2009, for 131 U.S. export industries and 88 import industries. We find that exchange rate volatility has short-run and long-run effects in only a fraction of the cases, but that exports respond more to increased uncertainty than imports do. In all, only 35 of the 74 U.S. export industries are affected (11 positive, 24 negative), whilst only three out of 37 import industries have positive coefficients and 11 have negative ones. We find no evidence that durable or nondurable goods are more likely to respond to volatility, whilst small industries or specialized goods might show more of a positive response.

Original languageEnglish (US)
Pages (from-to)243-260
Number of pages18
JournalEconomic Systems
Volume38
Issue number2
DOIs
StatePublished - Jun 2014

All Science Journal Classification (ASJC) codes

  • Economics and Econometrics

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