European Parliament Library

The Effects of Exchange Rate Change on the Trade Balance in Croatia, Tihomir Stucka

Abstract
A reduced-form model approach was used to estimate the trade balance response to permanent domestic currency depreciation. For this purpose, long-run and short-run effects were estimated, using three modeling methods along with two real effective exchange rate measures. On average, a 1 percent permanent depreciation improves the equilibrium trade balance by between 0.94 percent and 1.3 percent. The new equilibrium is established after approximately 2.5 years. Evidence of the J-curve is also found. Overall, in the light of the results obtained, it is questionable whether permanent depreciation is desirable to improve the trade balance, taking into account potential adverse effects on the rest of the economy
Table Of Contents
""Contents""; ""I. INTRODUCTION AND SUMMARY""; ""II. LITERATURE REVIEW""; ""III. REAL EXCHANGE RATE AND MERCHANDISE TRADE DEVELOPMENT IN CROATIA""; ""IV. THEORETICAL MODEL""; ""V. APPLIED ECONOMETRIC MODELS""; ""VI. DATA DESCRIPTION""; ""VII. EMPIRICAL RESULTS""; ""VIII. POLICY IMPLICATIONS""; ""IX. CONCLUSION""; ""REFERENCES""
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (30 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781452724034

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