期刊
ECONOMIC SYSTEMS
卷 46, 期 1, 页码 -出版社
ELSEVIER
DOI: 10.1016/j.ecosys.2021.100868
关键词
Balance of trade; Exchange rates; Currency misalignments; Global value chains; Panel; Cointegration
类别
资金
- VEGA [2/0158/18]
- European Union
- Slovak Research and Development Agency [APVV-18-0335]
This study evaluates the effect of exchange rate misalignments on the trade balance in new EU member states and finds asymmetric effects of real currency misalignments. It also highlights the role of global value chain participation in weakening the impact of currency misalignments on trade balance.
We evaluate the effect of exchange rate misalignments on the balance of trade and the role that global value chain participation plays in this effect for 11 new European Union member states. Using heterogeneous panel cointegration methods, we first estimate the real equilibrium exchange rate and detect episodes of currency misalignment. We find asymmetric effects of real currency misalignments: overvaluation has a negative effect, but undervaluation has no effect on the trade balance. Additionally, we find that global value chain participation weakens the effect of currency misalignments on the balance of trade. Therefore, our results suggest that globalization reduces the role of exchange rates in stimulating the domestic economy.
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