Do inpayments and outpayments respond to exchange rate changes asymmetrically: Evidence from Malaysia |
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| Authors: | Mohsen Bahmani-Oskooee Hanafiah Harvey |
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| Affiliation: | 1. The Center for Research on International Economics and the Department of Economics, The University of Wisconsin-Milwaukee, Milwaukee, Wisconsin, USA;2. Department of Economics, Pennsylvania State University, Mont Alto, Mont Alto, Pennsylvania, USA |
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| Abstract: | Since the pass-through of exchange rate changes on import and export prices are asymmetric, we expect a country’s inpayments (export earnings) and outpayments (cost of imports) to also react to exchange rate changes asymmetrically. We demonstrate this hypothesis by considering trade between Malaysia and each of her 11 largest trading partners. We find that while the short-run effects of exchange rate changes on Malaysia’s inpayments and outpayments are asymmetric with all partners, the long-run asymmetric effects are present in less than half of the partners. The results are partner specific. |
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| Keywords: | Asymmetry analysis exchange rate inpayments Malaysia outpayments trading partners |
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