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How sensitive are the U.S. inpayments and outpayments to real exchange rate changes: an asymmetry analysis

Original Paper

Abstract

Previous studies that assessed the impact of exchange rate changes on a country’s inpayments and outpayments assumed that such effects are symmetric. The evidence from the literature reveals that import and export prices react to exchange rate changes in an asymmetric manner. This implies that export earnings and payments for imports should also react to exchange rate changes in an asymmetric manner. We demonstrate this by using Shin et al.’s (2014) nonlinear ARDL approach and inpayments and outpayments of the U.S. with her 15 trading partners. We find evidence of short-run as well as long-run asymmetric effects in more than half of the models, though the findings are found to be partner specific.

Keywords

The U.S. Inpayments Outpayments Value of the dollar Asymmetry analysis 

JEL Classification

F31 

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.The Center for Research on International Economics and The Department of EconomicsThe University of Wisconsin-MilwaukeeMilwaukeeUSA
  2. 2.Department of Political Science, International Development and International AffairsThe University of Southern MississippiHattiesburgUSA

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