Search Results (3)

Trade-finance instruments may support export performance by alleviating financing constraints and reducing international payment risks. This study examines the short- and long-run relationships between Turkish Eximbank instruments and Turkey’s aggregate exports using annual data for 2001–2024. Three nested log-linear Autoregressive Distributed Lag (ARDL) models jointly incorporate short-term credits, medium- and long-term credits, insured shipment values and the real effective exchange rate. Intermediate-goods imports and external demand are added in the second model, while tariff and Russia–Ukraine war-period controls are introduced in the third. ADF, PP and KPSS tests examine the integration properties of the continuous variables and ARDL bounds tests evaluate the existence of long-run relationships. The bounds-test results support a relationship with levels in all three specifications, while the negative and significant error-correction coefficients indicate convergence toward equilibrium. Insured shipments have a positive and statistically significant short-run coefficient in every model and a positive long-run coefficient in the benchmark model. However, their long-run significance disappears after imported-input conditions and external demand are controlled for. Neither credit category exhibits a statistically significant relationship with exports. Intermediate-goods imports are positively associated with exports in both horizons, while external demand has a positive long-run relationship. The REER generally has the expected negative sign, but its significance is specification dependent. The findings identify insurance as the strongest short-run correlate of exports while showing that its long-run aggregate relationship is sensitive to macroeconomic conditions. Recipient-level data are required to establish causal program effects. Full article

This paper presents a comparative empirical analysis of three modeling approaches applied to the forecasting of Morocco’s Real Effective Exchange Rate (REER): the ARIMA model, the Random Forest algorithm, and the Dynamic Factor Model (DFM). Utilizing a comprehensive macroeconomic quarterly dataset spanning from 1999Q4 to 2021Q3, the study assesses the out-of-sample predictive performance of these models over a structurally dynamic period, including the transition to a more flexible exchange rate regime in 2018 and the global shock induced by the COVID-19 pandemic. The findings reveal that the Random Forest model significantly outperforms both ARIMA and DFM in terms of accuracy and adaptability to structural breaks. Variable importance analysis highlights the dominant role of real economic fundamentals, particularly industrial value added, inflation, and exports in explaining REER movements. In contrast, the ARIMA model underreacts to exogenous shocks due to its univariate structure, while the DFM suffers from a loss of predictive power likely caused by excessive dimensionality reduction. Full article

This paper examines the impact of special tariffs between China and the United States (US) on their indirect trade partners via spillover effects. We applied a Value-Added Real Effective Exchange Rate (VA-REER) index to simulate how an increase in tariffs induces changes in demand for goods from Indonesia and selected Asian partners. We used the Input–Output Database (WIOD) to simulate the spillover effects across partners via the Global Value Chain (GVC) using data from 2000 to 2014. The results suggest that demand is doubly more responsive to prices (tariffs) when value-added (VA-REER) index is used instead of the conventional REER index (gross trade). We found that US tariffs on Chinese goods have a negative spillover impact on Indonesia’s exports. Meanwhile, the Chinese tariffs on American goods lead to small increased demand for Indonesian exports. We also found that US and China become equally crucial for Indonesia under the Value-Added REER scheme, concluding that the conventional REER approach may have underestimated the impact of US tariffs on Chinese goods. Finally, we found that Indonesia would be at risk to trade shocks if the US applies tariffs on China, Asian partners (Japan and South Korea), and the European Union (EU). Full article