Trade liberalization and real exchange rate movement by Xiangming Li

Cover of: Trade liberalization and real exchange rate movement | Xiangming Li

Published by International Monetary Fund, European I Department in [Washington, D.C.] .

Written in English

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Subjects:

  • Free trade -- Econometric models.,
  • Foreign exchange rates -- Econometric models.,
  • Tariff -- Econometric models.,
  • International trade -- Econometric models.

Edition Notes

Book details

StatementXiangming Li.
GenreEconometric models.
SeriesIMF working paper -- WP/03/124
ContributionsInternational Monetary Fund. European I Dept.
The Physical Object
Pagination37 p. :
Number of Pages37
ID Numbers
Open LibraryOL22549995M

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Trade Liberalization and Real Exchange Rate Movement XIANGMING LI* Although theory suggests that the real exchange rate should depreciate after a per-manent trade liberalization but could appreciate temporarily with a transitory one, little empirical evidence exists.

Unlike existing studies that use either indirect. Although theory suggests that the real exchange rate should depreciate after a credible trade liberalization but could appreciate temporarily with a noncredible one, little empirical evidence exists. Unlike existing studies that use either indirect tests or unreliable openness measures, this paper uses an event study based on carefully documented trade liberalization in 45 countries.

Although theory suggests that the real exchange rate should depreciate after a credible trade liberalization but could appreciate temporarily with a noncredible one, little empirical evidence exists. Unlike existing studies that use either indirect tests or unreliable openness measures, this paper uses an event study based on carefully documented trade liberalization in 45 Cited by: 1.

Li () finds that trade liberalization has an important impact on real exchange rates. Real exchange rates generally depreciate after a country opens to trade, although there is evidence to Author: Xiangming Li. Unlike existing studies that use either indirect tests or openness measures that could be unreliable, this paper uses an event study based on individually documented trade liberalization in 45 countries.

The result shows that real exchange rates depreciate after countries open their economies to by: Title: Trade Liberalization and Real Exchange Rate Movement - WP/03/ Created Date: 6/18/ PM. Trade Liberalization, Real Exchange Rate, and Export Diversification in Selected North African Economies Cherkaoui Mouna Jalali Naini Ahmad Reza (September - First Draft) Cherkaoui Mouna is Professor at Mohamed V University, Rabat, Morocco and ERF associate fellow.

Trade Liberalization Efects on Real Exchange Rate: Nigeria 47 various degrees of trade liberalization recorded in Nigeria between and on the real exchange rate to see what support it provides for the theory of real exchange rate. In particular, it is desirable to determine.

how the real exchange rate a ects imports and exports the Marshall-Lerner condition the J-curve how trade-balance e ects can be incorporated into the monetary approach Trade Balance Response to the Real Exchange Rate We begin our analysis of the e ects of the exchange rate on the balance of trade with two simplifying Size: KB.

Although theory suggests that the real exchange rate should depreciate after a permanent trade liberalization but could appreciate temporarily with a transitory one, little empirical evidence exists.

Unlike existing studies that use either indirect tests or openness measures that could be unreliable, this paper uses an event study based on individually documented trade liberalization in 45 countries. of trade liberalization and exchange rate changes on fiscal outcomes.

The relationship between trade liberalization, the exchange rate, and tax revenue is therefore an issue of great practical importance. This paper examines this relationship in Sub-Saharan Africa.

We. Unlike existing studies that use either indirect tests or openness measures that could be unreliable, this paper uses an event study based on individually documented trade liberalization in 45 countries. The result shows that real exchange rates depreciate after countries open their economies to trade.

In the process of introducing market forces into their economies, many countries liberalized foreign trade, loosened control of the capital market, and privatized national industries. The large number of cases of trade liberalization provides an excellent testing ground for examining the effects of trade liberalization on the real exchange rate.

International trade and exchange rate. Mandaluyong City, Philippines: Asian Development Bank, 1. Gravity model. Real effective exchange rate.

Trade volume. Asian Development Bank. The views expressed in this publication are those of the authors and do Cited by: 2. Empirical evidence on the relationship between trade liberalization, exchange rates, and tax revenue is mixed.

This paper examines these linkages anew, using a methodology similar to that of Adam et al. [, Adam, C., Bevan, D., & Chambas, G. (), Exchange rate regimes and revenue performance in Sub-Saharan Africa, Journal of Development Economics, 64, –].Cited by: The Case for Trade Liberalization in Developing Countries 73 Table 1 Protection in a Sample of 50 Developing Countries sometimes responsible for at least half of the protectionism impact.

The table brings out that South and Central America and North Africa have had particu-larly high average tariff rates, and even more so in manufacturing. Within.

Although theory suggests that the real exchange rate should depreciate after a credible trade liberalization but could appreciate temporarily with a noncredible one, little empirical evidence exists. Unlike existing studies that use either indirect tests or unreliable openness measures, this paper uses an event study based on carefully Author: Xiangming Li.

movement of labor to provide services. Mode 4 accounts for only percent of services trade (fig-ure ).The lack of liberalization in labor services has been particularly costly to developing countries, whose comparative advantage lies in the export of medium- and low-skilled,labor-intensive services.

Trade Reform,Exports,and Economic GrowthFile Size: KB. Globalization and trade liberalization tends to make markets _____ effecient, causing change to occur _____ quickly.

International investors are especially concerned about the real interest rate because the real interest rate equals the nominal interest rate ___ the inflation rate Exchange rate overshooting occurs because exchange rates.

Trade liberalisation: global economic implications (English) Abstract. The purpose of this book is to use model simulations to explore the implications of further trade liberalization as envisaged under the Uruguay round and to examine other dominant issues in world trade, including the effects of the opening up of the Soviet Cited by: Key Words: Trade liberalization, Exchange Rate, Tax Revenue, Iran.

Introduction The liberalization of trade is strongly advocated as the means through which economies can accelerate their economic development. The prevailing opinion in trade-policy spheres is that expanded trade leads to prosperity. “It is excellent to see a volume written (with co-authors) by a careful, skilled econometrician, devoted to quantifying the effects that trade liberalization appears to have had The answers given in the chapters of this book paint an interesting mix of positive and negative effects, where the detail often differs by continent and by period.

TRADE LIBERALIZATION, EXCHANGE RATE AND EXPORT GROWTH IN PAKISTAN. The first aspect of the relationship between exchange rates and trade relates to exchange rate volatility. The basic argument for which an increase in exchange rate volatility would result in lower international trade is that there are risks and transaction costs associated with variability inFile Size: KB.

Trade liberalization is the removal or reduction of restrictions or barriers on the free exchange of goods between nations. This includes the removal or reduction of tariff obstacles, such as Author: Caroline Banton.

Trade liberalization is the removal of tariff and non-tariff barriers in trade, basically international. This has significant macroeconomic and distributional effects.

The Heckscher-Ohlin Trade Theorem is the basic theoretical foundation of trade liberalization. 6 Capital Flows, the Current Account, and the Real Exchange Rate: Some Consequences of Stabilization and Liberalization Maurice Obstfeld Introduction This paper develops a.

Substituting in the numbers from above gives real exchange rate = ( X $6) / lira = bottles of Italian wine per bottle of American wine. By using both the nominal exchange rate and the real exchange rate, we can deduce important information about the relative cost of living in two countries.

Impact of Trade Liberalisation on Economic Growth: The Case of the Southern African Customs Union (SACU) Countries adjusted trade ratios and the real effective exchange rate had an insignificant impact on economic growth.

However, turning to South Africa, the study unearthed that trade liberalisation was found to consistently have an impact Author: Farai Manwa.

Agricultural trade liberalization: implications for developing countries (English) Abstract. This book provides analytically based insights into the possible effects of agricultural trade liberalization on developing countries and thus gives impetus to the agricultural negotiations in the Uruguay by: trade zones and liberalization of trade in services.

Protection in Developing Countries Protection became the mode for most developing countries during the s. During the Depression, industrial countries adopted restrictive trade policies and commodity prices-a major source of earnings for developing countries-collapsed.

Downloadable. This is a study of 42 developing countries of Asia, Africa and Latin America in which we first examine the impact of trade liberalisation on economic growth, investment share of GDP, openness, trade balance and current accounts (as percentages of GDP). Both panel data and country by country data are used to measure the impact of liberalisation on domestic economic growth.

Trade Performance and Export Performance in Bolivia which it has a support for the movement from trade restriction to a more liberalized trading.

export to real exchange rate-based trade Author: Rhys Jenkins. Asher () examined the impact of exchange rate fluctuation on the Nigeria economic growth for period of – The result showed that real exchange rate has a positive effect on the economic growth.

In a similar study, Akpan () investigated foreign exchange. Trade liberalization has been at the center of South Africa’s post-Apartheid development strategy.

However, despite considerable reforms, the country has failed to generate pro-poor growth, with both ; Edwards, ). However, the depreciation of the real exchange rate during this time may have also been an important factor in.

Ahmed () investigated the response of aggregate merchandise exports to a trade liberalization programme based on the RER and found the depreciation of the real effective exchange rate to be Author: Nasiruddin Ahmed.

Capital Flows, the Current Account, and the Real Exchange Rate: Consequences of Liberalization and Stabilization Article (PDF Available) May with 97 Reads How we measure 'reads'.

Xiangming Li, "Trade Liberalization and Real Exchange Rate Movement," IMF Staff Papers, Palgrave Macmillan, vol. 51(3), pagesy, William. GDP, inflation, the real exchange rate and tariffs – – % Change Growth rate: real GDP 1 y Inflation rate wholesale prices 10 14 Real exchange rate CPI based Tariffs Diversified Electrical machinery Non-electrical machinery Electronics 76 File Size: 97KB.

Trade Liberalization and Labor Market Adjustment in Botswana: w Mengxiao Liu Real Exchange Rate and International Reserves in the Era of Growing Financial and Trade Integration Beyond Goods and Services: Competition Policy, Investment, Mutual Recognition, Movement of Persons, and Broader Cooperation Provisions of Recent FTAs.

Xiangming Li, "Trade Liberalization and Real Exchange Rate Movement," IMF Working Papers 03/, International Monetary Fund. Amelia U. Santos-Paulino, "Trade Liberalisation and Economic Performance: Theory and Evidence for Developing Countries," The World Economy, Wiley Blackwell, vol.

28(6), pagesJune.Financial account liberalization may cause real exchange rate volatility and impede the movement of factors of production from nontraded into traded goods industries.

• The importance of contagion: the vulnerability of even seemingly healthy economies to crises of confidence generated by events elsewhere in the world – a domino effect that has to come to be known as contagion.Journal of Economics and Sustainable Development ISSN (Paper) ISSN (Online) Vol.5, No.3, Trade liberalization and export performance in Tanzanian cashew.

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