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| Author: | Campa, J. M. |
| Title: | Exchange rates and trade: how important is hysteresis in trade? |
| Journal: | European Economic Review
2004 : JUN, VOL. 48:3, p. 527-548 |
| Index terms: | Hysteresis Exchange rates Exporting |
| Language: | eng |
| Abstract: | This article focuses on the impact of exchange rate changes on country's export supply. The existence and the relevance of hysteresis in the export markets is tested using data collected from Spanish manufacturing firms. The results show that sunk costs hysteresis is an important factor in sorting out export market participation. However, the degree of hysteresis does not appear to relate to the degree of exchange rate uncertainty faced by the exporter. In the end, the effect of hysteresis on the responsiveness of aggregate trade volumes to exchange rate changes is rather small. |
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