Depreciations without Exports? : Global Value Chains and the Exchange Rate Elasticity of Exports
This paper analyzes how the exchange rate elasticity of exports has changed over time and across countries and sectors, and how the formation of global value chains has affected this relationship. The analysis uses a panel framework covering 46 cou...
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/08/24895630/depreciations-without-exports-global-value-chains-exchange-rate-elasticity-exports http://hdl.handle.net/10986/22440 |
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okr-10986-224402021-04-23T14:04:09Z Depreciations without Exports? : Global Value Chains and the Exchange Rate Elasticity of Exports Ahmed, Swarnali Appendino, Maximiliano Ruta, Michele GROWTH RATES ECONOMIC GROWTH PRODUCTION NOMINAL EXCHANGE RATES FIXED EFFECT COUNTRY FIXED EFFECTS DEPRECIATION CONSUMER PRICE INDICES REAL EXCHANGE RATES IMPORT TRADE BARRIERS EXCHANGE REAL GDP CHANGES IN TRADE GDP PER CAPITA EXPORTS ELASTICITY OF EXPORTS ELASTICITY TRADE FLOWS RECESSION EXPORTERS PRICE INDICES WORLD DEVELOPMENT INDICATORS MACROECONOMIC CONDITIONS VARIABLES SLOWDOWN INPUTS DUMPING REAL EXCHANGE RATE ECONOMIC OUTLOOK FINAL GOODS IMPORT CONTENT REAL EFFECTIVE EXCHANGE RATE EFFECTIVE EXCHANGE RATE GROSS EXPORTS INFLUENCE REAL DEPRECIATION ABSOLUTE VALUE CURRENCY DEVELOPMENT ECONOMICS EXPORT GROWTH EXCHANGE RATE MOVEMENTS REAL GDP TRADE INTEGRATION VALUE‐ADDED INCOME GROWTH REAL EFFECTIVE EXCHANGE RATES EXCHANGE RATES COUNTRY FIXED EFFECT MACROECONOMIC MODELS FOREIGN FIRMS CURRENCY DEPRECIATIONS IMPORT PROTECTION REAL EXCHANGE RATE CHANGE WTO DEPRECIATIONS BUSINESS CYCLE ACCESS INTERNATIONAL ECONOMICS TRADE POLICY RATE MOVEMENTS TRADE POLICIES ECONOMIC RESEARCH REAL EXCHANGE RATE CHANGE VALUE ADDED KNOWLEDGE SPILLOVERS EXTERNAL DEMAND TOTAL EXPORTS DEFLATORS INTERNATIONAL TRADE TRADE RESTRICTIVENESS FINANCIAL CRISIS VALUE DEPENDENT VARIABLE COMPETITIVENESS TRADE GROWTH CREDIT FORMAL ANALYSIS MACROECONOMICS DEMAND EXPORT SHARES INTERMEDIATE GOODS REAL EXCHANGE RATE CHANGE ECONOMY CONSUMERS REAL EXCHANGE RATE LOCAL CURRENCY REAL EXPORTS FIXED EFFECTS BUSINESS CYCLES TRADE DATA TRADE CURRENCY DEPRECIATION USE VALUE GDP GOODS THEORY GLOBAL TRADE REAL DEPRECIATIONS REAL EXPORT GROWTH EFFECTIVE EXCHANGE RATES SUPPLY TRADE RELATIONS GLOBAL DEMAND EXPORT VOLUMES PRICE COMPETITIVENESS WORLD TRADE VALUE ADDED REVALUATION ECONOMIC HISTORY CYCLICAL FACTORS EXCHANGE RATE REAL EFFECTIVE EXCHANGE RATE BUSINESS CYCLE SYNCHRONIZATION INTERMEDIATE INPUTS TRADING PARTNERS MEASURES OF INTEGRATION REAL EXPORT MACROECONOMIC ADJUSTMENT REAL EXCHANGE RATE CHANGES ECONOMIES DEVELOPMENT POLICY TOTAL EXPORT FUTURE RESEARCH This paper analyzes how the exchange rate elasticity of exports has changed over time and across countries and sectors, and how the formation of global value chains has affected this relationship. The analysis uses a panel framework covering 46 countries over the period 1996-2012, and first finds evidence that the elasticity of manufacturing export volumes to the real effective exchange rate has decreased over time. The paper then examines whether the formation of supply chains has affected this elasticity using different measures of global value chain integration. Intuitively, as countries are more integrated in global production processes, a currency depreciation only improves the competitiveness of a fraction of the value of final goods exports. In line with this intuition, the analysis finds evidence that the rise of participation in global value chains explains on average 40 percent of the fall in the elasticity, and that corrections of the real effective exchange rate for participation in global value chains do not present the same decreasing pattern in elasticity. 2015-08-17T18:27:03Z 2015-08-17T18:27:03Z 2015-08 Working Paper http://documents.worldbank.org/curated/en/2015/08/24895630/depreciations-without-exports-global-value-chains-exchange-rate-elasticity-exports http://hdl.handle.net/10986/22440 English en_US Policy Research Working Paper;No. 7390 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper |
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Digital Repository |
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Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
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World Bank |
| language |
English en_US |
| topic |
GROWTH RATES ECONOMIC GROWTH PRODUCTION NOMINAL EXCHANGE RATES FIXED EFFECT COUNTRY FIXED EFFECTS DEPRECIATION CONSUMER PRICE INDICES REAL EXCHANGE RATES IMPORT TRADE BARRIERS EXCHANGE REAL GDP CHANGES IN TRADE GDP PER CAPITA EXPORTS ELASTICITY OF EXPORTS ELASTICITY TRADE FLOWS RECESSION EXPORTERS PRICE INDICES WORLD DEVELOPMENT INDICATORS MACROECONOMIC CONDITIONS VARIABLES SLOWDOWN INPUTS DUMPING REAL EXCHANGE RATE ECONOMIC OUTLOOK FINAL GOODS IMPORT CONTENT REAL EFFECTIVE EXCHANGE RATE EFFECTIVE EXCHANGE RATE GROSS EXPORTS INFLUENCE REAL DEPRECIATION ABSOLUTE VALUE CURRENCY DEVELOPMENT ECONOMICS EXPORT GROWTH EXCHANGE RATE MOVEMENTS REAL GDP TRADE INTEGRATION VALUE‐ADDED INCOME GROWTH REAL EFFECTIVE EXCHANGE RATES EXCHANGE RATES COUNTRY FIXED EFFECT MACROECONOMIC MODELS FOREIGN FIRMS CURRENCY DEPRECIATIONS IMPORT PROTECTION REAL EXCHANGE RATE CHANGE WTO DEPRECIATIONS BUSINESS CYCLE ACCESS INTERNATIONAL ECONOMICS TRADE POLICY RATE MOVEMENTS TRADE POLICIES ECONOMIC RESEARCH REAL EXCHANGE RATE CHANGE VALUE ADDED KNOWLEDGE SPILLOVERS EXTERNAL DEMAND TOTAL EXPORTS DEFLATORS INTERNATIONAL TRADE TRADE RESTRICTIVENESS FINANCIAL CRISIS VALUE DEPENDENT VARIABLE COMPETITIVENESS TRADE GROWTH CREDIT FORMAL ANALYSIS MACROECONOMICS DEMAND EXPORT SHARES INTERMEDIATE GOODS REAL EXCHANGE RATE CHANGE ECONOMY CONSUMERS REAL EXCHANGE RATE LOCAL CURRENCY REAL EXPORTS FIXED EFFECTS BUSINESS CYCLES TRADE DATA TRADE CURRENCY DEPRECIATION USE VALUE GDP GOODS THEORY GLOBAL TRADE REAL DEPRECIATIONS REAL EXPORT GROWTH EFFECTIVE EXCHANGE RATES SUPPLY TRADE RELATIONS GLOBAL DEMAND EXPORT VOLUMES PRICE COMPETITIVENESS WORLD TRADE VALUE ADDED REVALUATION ECONOMIC HISTORY CYCLICAL FACTORS EXCHANGE RATE REAL EFFECTIVE EXCHANGE RATE BUSINESS CYCLE SYNCHRONIZATION INTERMEDIATE INPUTS TRADING PARTNERS MEASURES OF INTEGRATION REAL EXPORT MACROECONOMIC ADJUSTMENT REAL EXCHANGE RATE CHANGES ECONOMIES DEVELOPMENT POLICY TOTAL EXPORT FUTURE RESEARCH |
| spellingShingle |
GROWTH RATES ECONOMIC GROWTH PRODUCTION NOMINAL EXCHANGE RATES FIXED EFFECT COUNTRY FIXED EFFECTS DEPRECIATION CONSUMER PRICE INDICES REAL EXCHANGE RATES IMPORT TRADE BARRIERS EXCHANGE REAL GDP CHANGES IN TRADE GDP PER CAPITA EXPORTS ELASTICITY OF EXPORTS ELASTICITY TRADE FLOWS RECESSION EXPORTERS PRICE INDICES WORLD DEVELOPMENT INDICATORS MACROECONOMIC CONDITIONS VARIABLES SLOWDOWN INPUTS DUMPING REAL EXCHANGE RATE ECONOMIC OUTLOOK FINAL GOODS IMPORT CONTENT REAL EFFECTIVE EXCHANGE RATE EFFECTIVE EXCHANGE RATE GROSS EXPORTS INFLUENCE REAL DEPRECIATION ABSOLUTE VALUE CURRENCY DEVELOPMENT ECONOMICS EXPORT GROWTH EXCHANGE RATE MOVEMENTS REAL GDP TRADE INTEGRATION VALUE‐ADDED INCOME GROWTH REAL EFFECTIVE EXCHANGE RATES EXCHANGE RATES COUNTRY FIXED EFFECT MACROECONOMIC MODELS FOREIGN FIRMS CURRENCY DEPRECIATIONS IMPORT PROTECTION REAL EXCHANGE RATE CHANGE WTO DEPRECIATIONS BUSINESS CYCLE ACCESS INTERNATIONAL ECONOMICS TRADE POLICY RATE MOVEMENTS TRADE POLICIES ECONOMIC RESEARCH REAL EXCHANGE RATE CHANGE VALUE ADDED KNOWLEDGE SPILLOVERS EXTERNAL DEMAND TOTAL EXPORTS DEFLATORS INTERNATIONAL TRADE TRADE RESTRICTIVENESS FINANCIAL CRISIS VALUE DEPENDENT VARIABLE COMPETITIVENESS TRADE GROWTH CREDIT FORMAL ANALYSIS MACROECONOMICS DEMAND EXPORT SHARES INTERMEDIATE GOODS REAL EXCHANGE RATE CHANGE ECONOMY CONSUMERS REAL EXCHANGE RATE LOCAL CURRENCY REAL EXPORTS FIXED EFFECTS BUSINESS CYCLES TRADE DATA TRADE CURRENCY DEPRECIATION USE VALUE GDP GOODS THEORY GLOBAL TRADE REAL DEPRECIATIONS REAL EXPORT GROWTH EFFECTIVE EXCHANGE RATES SUPPLY TRADE RELATIONS GLOBAL DEMAND EXPORT VOLUMES PRICE COMPETITIVENESS WORLD TRADE VALUE ADDED REVALUATION ECONOMIC HISTORY CYCLICAL FACTORS EXCHANGE RATE REAL EFFECTIVE EXCHANGE RATE BUSINESS CYCLE SYNCHRONIZATION INTERMEDIATE INPUTS TRADING PARTNERS MEASURES OF INTEGRATION REAL EXPORT MACROECONOMIC ADJUSTMENT REAL EXCHANGE RATE CHANGES ECONOMIES DEVELOPMENT POLICY TOTAL EXPORT FUTURE RESEARCH Ahmed, Swarnali Appendino, Maximiliano Ruta, Michele Depreciations without Exports? : Global Value Chains and the Exchange Rate Elasticity of Exports |
| relation |
Policy Research Working Paper;No. 7390 |
| description |
This paper analyzes how the exchange
rate elasticity of exports has changed over time and across
countries and sectors, and how the formation of global value
chains has affected this relationship. The analysis uses a
panel framework covering 46 countries over the period
1996-2012, and first finds evidence that the elasticity of
manufacturing export volumes to the real effective exchange
rate has decreased over time. The paper then examines
whether the formation of supply chains has affected this
elasticity using different measures of global value chain
integration. Intuitively, as countries are more integrated
in global production processes, a currency depreciation only
improves the competitiveness of a fraction of the value of
final goods exports. In line with this intuition, the
analysis finds evidence that the rise of participation in
global value chains explains on average 40 percent of the
fall in the elasticity, and that corrections of the real
effective exchange rate for participation in global value
chains do not present the same decreasing pattern in elasticity. |
| format |
Working Paper |
| author |
Ahmed, Swarnali Appendino, Maximiliano Ruta, Michele |
| author_facet |
Ahmed, Swarnali Appendino, Maximiliano Ruta, Michele |
| author_sort |
Ahmed, Swarnali |
| title |
Depreciations without Exports? : Global Value Chains and the Exchange Rate Elasticity of Exports |
| title_short |
Depreciations without Exports? : Global Value Chains and the Exchange Rate Elasticity of Exports |
| title_full |
Depreciations without Exports? : Global Value Chains and the Exchange Rate Elasticity of Exports |
| title_fullStr |
Depreciations without Exports? : Global Value Chains and the Exchange Rate Elasticity of Exports |
| title_full_unstemmed |
Depreciations without Exports? : Global Value Chains and the Exchange Rate Elasticity of Exports |
| title_sort |
depreciations without exports? : global value chains and the exchange rate elasticity of exports |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/08/24895630/depreciations-without-exports-global-value-chains-exchange-rate-elasticity-exports http://hdl.handle.net/10986/22440 |
| _version_ |
1764451088485842944 |