Does the Exchange Rate Regime Affect Export Volumes? Evidence from Bilateral Exports in the US-UK trade: 1900-1998
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Fountas S. & Kyriacos A. (2000) "Does the Exchange Rate Regime Affect Export Volumes? Evidence from Bilateral Exports in the US-UK trade: 1900-1998" (Working Paper No. 0043) Department of Economics, National University of Ireland, Galway.
By utilizing the techniques of multivariate cointegration and error correction models, we investigate the impact of the different exchange-rate regimes that spanned the 20th century on the bilateral exports between the UK and the US over the last 98 years. Our results support two conclusions. First, fixed exchange-rate regimes and managed float exchange-rate regimes are equally conducive to trade. Second, freely floating exchange-rate regimes are more conducive to trade than fixed exchange-rate regimes.