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On the impact of exchange rate volatility on Tunisia’s trade with 16 partners: an asymmetry analysis

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  • Mohsen Bahmani-Oskooee

    (The University of Wisconsin-Milwaukee)

  • Ridha Nouira

    (Monastir University)

Abstract

Exchange rate uncertainty measured by its volatility is said to affect trade flows in either direction. A limited number of recent studies show that the response of trade flows to exchange rate volatility could be asymmetric, mostly due to change in traders’ expectations. In this paper, we test the symmetric and asymmetric effects of exchange rate volatility on Tunisia’s bilateral trade with each of its 16 partners. We find that Tunisia’s trade flows to each partner are affected asymmetrically in the short run but not in the long run. In almost half of the sample, the long-run effects were symmetric.

Suggested Citation

  • Mohsen Bahmani-Oskooee & Ridha Nouira, 2020. "On the impact of exchange rate volatility on Tunisia’s trade with 16 partners: an asymmetry analysis," Economic Change and Restructuring, Springer, vol. 53(3), pages 357-378, August.
    • Handle: RePEc:kap:ecopln:v:53:y:2020:i:3:d:10.1007_s10644-019-09250-y
    DOI: 10.1007/s10644-019-09250-y
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    References listed on IDEAS

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    2. Jia Xu & Mohsen Bahmani‐Oskooee & Huseyin Karamelikli, 2022. "On the link between U.S.‐China commodity trade and exchange rate uncertainty: An asymmetric analysis," Australian Economic Papers, Wiley Blackwell, vol. 61(1), pages 87-137, March.
    3. Mohsen Bahmani‐Oskooee & Toan Luu Duc Huynh & Muhammad Ali Nasir, 2021. "On the asymmetric effects of exchange‐rate volatility on trade flows: Evidence from US–UK Commodity Trade," Scottish Journal of Political Economy, Scottish Economic Society, vol. 68(1), pages 51-102, February.
    4. Mohsen Bahmani-Oskooee & Huseyin Karamelikli, 2022. "Exchange Rate Volatility and Commodity Trade between U.K. and China: An Asymmetric Analysis," Chinese Economy, Taylor & Francis Journals, vol. 55(1), pages 41-65, January.
    5. Mohsen Bahmani-Oskooee & Augustine C. Arize & Ebere Ume Kalu, 2023. "On the asymmetric effects of exchange rate volatility on the U.S. Bilateral Trade with its 12 South American partners," Economic Change and Restructuring, Springer, vol. 56(2), pages 701-732, April.
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    8. Lee, Chien-Hui & Li, Shu-Hui & Lee, Jen-Yu, 2022. "An asymmetric impact analysis of the exchange rate volatility on commodity trade between the U.S. and China," International Review of Economics & Finance, Elsevier, vol. 82(C), pages 399-415.
    9. Shazia Kousar & Saeed Ahmad Sabir & Farhan Ahmed & Štefan Bojnec, 2022. "Climate Change, Exchange Rate, Twin Deficit, and Energy Inflation: Application of VAR Model," Energies, MDPI, vol. 15(20), pages 1-21, October.
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    More about this item

    Keywords

    Exchange rate volatility; Tunisia; Sixteen trading partners; Asymmetry analysis;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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