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Slow Rockets and Fast Feathers or the Link between Exchange Rates and Exports: A Case Study for Pakistan

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dc.contributor.authorBrun, Martin
dc.contributor.authorGambetta, Juan Pedro
dc.contributor.authorVarela, Gonzalo J.
dc.date.accessioned2020-08-13T14:42:04Z
dc.date.available2020-08-13T14:42:04Z
dc.date.issued2020-08
dc.description.abstractExport responses to real exchange rate (RER) depreciations in Pakistan are lower than those to appreciations. This paper empirically documents this asymmetric response using macro-level data. It then relies on a disaggregated export product–level data set for 2003–17 to test, within a panel fixed-effects framework, three hypotheses explaining the low export response to depreciations, focusing on information costs, supply constraints, and pricing to market. The analysis finds that (i) exports of differentiated products grow more slowly when the RER depreciates than they fall when it appreciates; (ii) exports from sectors with relatively greater supply constraints—in particular related to accessing finance- respond less to depreciations than to appreciations; and (iii) dollar prices for Pakistani exports tend to fall after nominal depreciations of the Pakistani rupee, in violation of the Dominant Currency Paradigm and consistent with pricing-to-market behavior, further accounting for the low response of exports to RER depreciations.en
dc.identifierhttp://documents.worldbank.org/curated/en/561931597063569779/Slow-Rockets-and-Fast-Feathers-or-the-Link-between-Exchange-Rates-and-Exports-A-Case-Study-for-Pakistan
dc.identifier.doi10.1596/1813-9450-9353
dc.identifier.urihttps://hdl.handle.net/10986/34350
dc.languageEnglish
dc.publisherWorld Bank, Washington, DC
dc.relation.ispartofseriesPolicy Research Working Paper;No. 9353
dc.rightsCC BY 3.0 IGO
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjectTRADE AND INVESTMENT
dc.subjectEXCHANGE RATE
dc.subjectEXPORTS
dc.subjectREAL EXCHANGE RATE
dc.subjectEXPORT PERFORMANCE
dc.subjectFINANCIAL DEPENDENCE
dc.subjectPRICING TO MARKET
dc.subjectTHRESHOLD AUTOREGRESSIVE MODEL
dc.subjectCURRENCY DEPRECIATION
dc.titleSlow Rockets and Fast Feathers or the Link between Exchange Rates and Exportsen
dc.title.subtitleA Case Study for Pakistanen
dc.typeWorking Paperen
dc.typeDocument de travailfr
dc.typeDocumento de trabajoes
dspace.entity.typePublication
okr.crossref.titleSlow Rockets and Fast Feathers or the Link between Exchange Rates and Exports: A Case Study for Pakistan
okr.date.disclosure2020-08-10
okr.doctypePublications & Research
okr.doctypePublications & Research::Policy Research Working Paper
okr.docurlhttp://documents.worldbank.org/curated/en/561931597063569779/Slow-Rockets-and-Fast-Feathers-or-the-Link-between-Exchange-Rates-and-Exports-A-Case-Study-for-Pakistan
okr.guid561931597063569779
okr.identifier.doi10.1596/1813-9450-9353
okr.identifier.externaldocumentum090224b087d3d41c_4_0
okr.identifier.internaldocumentum32312650
okr.identifier.reportWPS9353
okr.importedtrueen
okr.language.supporteden
okr.pdfurlhttp://documents.worldbank.org/curated/en/561931597063569779/pdf/Slow-Rockets-and-Fast-Feathers-or-the-Link-between-Exchange-Rates-and-Exports-A-Case-Study-for-Pakistan.pdfen
okr.region.administrativeSouth Asia
okr.region.countryPakistan
okr.statistics.combined2307
okr.statistics.dr561931597063569779
okr.statistics.drstats1363
okr.topicFinance and Financial Sector Development::Currencies and Exchange Rates
okr.topicInternational Economics and Trade::Export Competitiveness
okr.unitMacroeconomics, Trade and Investment Global Practice
relation.isSeriesOfPublication26e071dc-b0bf-409c-b982-df2970295c87
relation.isSeriesOfPublication.latestForDiscovery26e071dc-b0bf-409c-b982-df2970295c87
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