EFFECTS OF EXCHANGE RATE ARRANGEMENTS ON TRADE COOPERATION IN BRICS COUNTRIES
Journal Title: Asian Economic and Financial Review - Year 2015, Vol 5, Issue 3
Abstract
This paper investigated the effects of imposed exchange rate arrangements on trade volume of BRICS countries. This study examined emerging economies, were consists of Brazil, Russia, India, China, and South Africa during the years 2001-2013 using the generalized gravity model and a two-step generalized method of moments, (GMM). The results indicated that applying different exchange rate arrangements has had significant influence on imports. Pegged (PG) and crawling pegged (CP) exchange rate arrangements had significant and positive effect on trade flow (export). Bilateral imports, improved with imposing managed floating (MF) arrangements. Free-floating (FL) arrangements have been meaningless, and a negative impact on the volume of bilateral trade (exports) between members. In BRICS countries, imposing pegged exchange rate arrangements improved bilateral trade toward export and inversely free-floating arrangements improved bilateral trade toward import.
Authors and Affiliations
Bita Shaygani| Assistant Professor, Department of Economics Payam Noor University, I. R. of Iran, Asghar Abolhasani Hastiani| Associate Professor, Department of Economics Payam Noor University, I. R. of Iran, Farhad Ghaffari| Assistant Professor, Department of Economics Islamic Azad University, I. R. of Iran, Mahdi Sadeghi shahdani| Associate Professor, Department of Economics Imam Sadegh (AS) University, I. R. of Iran, Mahdi Fadaee*| PhD Candidate in Economics, Payam Noor University, I. R. of Iran
Keywords
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