Dr. Sandro Steinbach, University of Connecticut
Seminar Title: “Exchange Rate Volatility and International Food Trade”
Abstract: This paper analyzes the impact of exchange rate volatility on international food trade. Although the theoretical literature suggests ambivalence regarding the sign and magnitude of this effect, most empirical studies indicate a negative association between exchange rate volatility and international trade flows. This paper contributes to the ongoing debate by investigating the relationship at the product-level using a gravity-type regression specification and relying on detailed retrospective trade and exchange rate data for 159 countries over the period from 2001 to 2017. The estimates for 781 food products provide only limited evidence for a significant effect of short-run and long-run volatility measures on international trade flows. Overall, the results show smaller short-run than long-run effects of exchange rate volatility. While trade in bulk products is positively affected by short-run volatility, the results indicate that trade in aquaculture products correlates negatively with exchange rate volatility. The estimates also suggest that processed products are more likely to be adversely affected by volatility than semi-processed products. These findings imply that the impact of exchange rate volatility can vary significantly depending on the industry characteristics. Therefore, the paper enhances the understanding of the implications of exchange rate volatility, which is a primary source of concern for monetary policymakers worldwide.
Wednesday, December 4, 2019
2:30pm-3:30pm
Location: White 209
View the full Fall 2019 ARE Seminar Schedule
For more information, contact: Tatiana Andreyeva at tatiana.andreyeva@uconn.edu