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 language | English |
|---|---|
| Pages (from-to) | 237-254 |
| Number of pages | 18 |
| Journal | Buletin Ekonomi Moneter dan Perbankan |
| Volume | 24 |
| Issue number | 2 |
| DOIs | |
| Publication status | Published - 2021 |
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Keywords
- Money supply shock
- Panel data
- Real exchange rate
- Trade openness
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