Does the service trade openness mitigate real exchange rate volatility?

Febrio Kacaribu, Syahda Sabrina, Teuku Riefky

Research output: Contribution to journalArticlepeer-review

Abstract

This study examines the relationship between trade openness and exchange rate volatility. We use panel data of 52 countries and document trade openness has a negative and statistically significant effect on exchange rate volatility. The second explanatory variable considered in the model is money supply shock which is found to have a positive and statistically significant effect on exchange rate volatility. Our results survive a battery of robustness checks.

Original languageEnglish
Pages (from-to)237-254
Number of pages18
JournalBuletin Ekonomi Moneter dan Perbankan
Volume24
Issue number2
DOIs
Publication statusPublished - 2021

Keywords

  • Money supply shock
  • Panel data
  • Real exchange rate
  • Trade openness

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