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Open AccessArticle

Exchange Rate Risk and Uncertainty and Trade Flows: Asymmetric Evidence from Asia

1
Department of Economics and the Center for Research on International Economics, the University of Wisconsin-Milwaukee, Milwaukee, WI 53201, USA
2
School of Economics, Quiad-i-Azam University, Islamabad 44000, Pakistan
*
Author to whom correspondence should be addressed.
J. Risk Financial Manag. 2020, 13(6), 128; https://doi.org/10.3390/jrfm13060128
Received: 26 May 2020 / Revised: 10 June 2020 / Accepted: 11 June 2020 / Published: 15 June 2020
(This article belongs to the Special Issue Trade, Economic and Financial Crisis)
Very recently, the link between exchange rate volatility and trade flows has entered into a new direction in which researchers assess the possibility of asymmetric response of trade flows to a measure of exchange rate uncertainty. We add to this literature by estimating a linear and a nonlinear ARDL model to learn about the experiences of Asian countries, i.e., Pakistan, Japan, China, Korea, Singapore, Malaysia, the Philippines, and India. Like other studies in the literature, nonlinear models yielded relatively more significant results. In some cases, while the linear models showed no significant effects of exchange rate volatility on trade flows, the nonlinear models revealed significant effects. In some other cases, the opposite was true. View Full-Text
Keywords: exchange rate volatility; trade flows; asymmetry effects; Asia exchange rate volatility; trade flows; asymmetry effects; Asia
MDPI and ACS Style

Bahmani-Oskooee, M.; Akhtar, P.; Ullah, S.; Majeed, M.T. Exchange Rate Risk and Uncertainty and Trade Flows: Asymmetric Evidence from Asia. J. Risk Financial Manag. 2020, 13, 128.

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