Uncertainty and Export Performance: Evidence from 18 Countries |
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Authors: | KEVIN B. GRIER,AARON D. SMALLWOOD&dagger |
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Affiliation: | Kevin B. Grier;is a Professor in the Department of Economics at University of Oklahoma (E-mail:). Aaron D. Smallwood;is an Assistant Professor in the Department of Economics at the University of Texas–Arlington (E-mail:). |
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Abstract: | We study a sample of nine developed and nine developing countries to evaluate the questions of how foreign income uncertainty and real exchange rate (RER) uncertainty impact international trade and how those impacts vary according to stage of development. RER uncertainty has a negative and significant impact on export growth for six of the nine less developed countries in our sample, while it has an insignificant effect for a majority of the developed countries. In both groups, foreign income uncertainty has a more pervasively significant (and frequently larger) influence on trade than does RER uncertainty. |
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Keywords: | export growth real exchange rate uncertainty income uncertainty asymmetric GARCH |
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