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Exchange Rate Volatility and Exports: The Case of Ireland

Author

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  • Stilianos Fountas
  • Donal Bredin

    (Department of Economics, National University of Ireland, Galway)

Abstract

We use the techniques of cointegration and error-correction models to estimate long-run and short-run export demand functions for Ireland using quarterly data for the 1979-1993 period. We consider three determinants of exports: foreign income, relative prices, and exchange rate volatility. Our results indicate that exports depend significantly on foreign income and relative prices, in particular in the long run. Exchange rate uncertainty, proxied by exchange rate volatility, appears to depress export volume only in the short run according to our estimated error-correction model.

Suggested Citation

  • Stilianos Fountas & Donal Bredin, 1997. "Exchange Rate Volatility and Exports: The Case of Ireland," Working Papers 16, National University of Ireland Galway, Department of Economics, revised 1997.
    • Handle: RePEc:nig:wpaper:0016
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    References listed on IDEAS

    as
    1. Agathe Cote, 1994. "Exchange Rate Volatility and Trade," International Trade 9406001, University Library of Munich, Germany, revised 28 Jun 1994.
    2. Brendan M. Walsh, 1996. "The real exchange rate, fiscal policy and the current account : interpreting recent Irish experience," Working Papers 199610, School of Economics, University College Dublin.
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    Cited by:

    1. Ranajoy Bhattacharyya & Bipradas Rit, 2018. "On the Relationship between the Nominal Exchange Rate and Export Demand in India," South Asian Journal of Macroeconomics and Public Finance, , vol. 7(2), pages 260-282, December.
    2. Erdal Demirhan & Banu Demirhan, 2015. "The Dynamic Effect of ExchangeRate Volatility on Turkish Exports: Parsimonious Error-Correction Model Approach," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 62(4), pages 429-451, September.
    3. Heidi Aly & Rana Hosni, 2018. "Examining the nexus between exchange rate volatility and export performance: Empirical evidence from the Egyptian experience," Business and Economic Horizons (BEH), Prague Development Center, vol. 14(3), pages 542-560, June.
    4. P., Srinivasan & M., Kalaivani, 2012. "Exchange Rate Volatility and Export Growth in India: An Empirical Investigation," MPRA Paper 43828, University Library of Munich, Germany.
    5. Hasanov Akram, 2011. "Exchange rate risk and trade flows: the case of Belarus, Kazakhstan, Russia, and Ukraine," EERC Working Paper Series 11/09e, EERC Research Network, Russia and CIS.
    6. Morad Bali & Thanh T. Nguyen & Lincoln F. Pratson, 2024. "Impacts of EU Sanctions Levied in 2014 on Individual European Countries' Exports to Russia: Winners and Losers," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 50(2), pages 154-194, April.
    7. Bouoiyour, Jamal & Selmi, Refk, 2014. "How Robust is the Connection between Exchange Rate Uncertainty and Tunisia’s Exports?," MPRA Paper 57505, University Library of Munich, Germany.
    8. Yuan, Yan & Awokuse, Titus O., 2003. "Exchange Rate Volatility And U.S. Poultry Exports: Evidence From Panel Data," 2003 Annual meeting, July 27-30, Montreal, Canada 22083, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    JEL classification:

    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance

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