Working Paper

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

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collection.link.5
https://openknowledge.worldbank.org/handle/10986/9
collection.name.5
Policy Research Working Papers
dc.contributor.author
Brun, Martin
dc.contributor.author
Gambetta, Juan Pedro
dc.contributor.author
Varela, Gonzalo J.
dc.date.accessioned
2020-08-13T14:42:04Z
dc.date.available
2020-08-13T14:42:04Z
dc.date.issued
2020-08
dc.date.lastModified
2021-07-23T12:10:17Z
dc.description.abstract
Export 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.identifier
http://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.uri
http://hdl.handle.net/10986/34350
dc.language
English
dc.publisher
World Bank, Washington, DC
dc.relation.ispartofseries
Policy Research Working Paper;No. 9353
dc.rights
CC BY 3.0 IGO
dc.rights.holder
World Bank
dc.rights.uri
http://creativecommons.org/licenses/by/3.0/igo
dc.subject
TRADE AND INVESTMENT
dc.subject
EXCHANGE RATE
dc.subject
EXPORTS
dc.subject
REAL EXCHANGE RATE
dc.subject
EXPORT PERFORMANCE
dc.subject
FINANCIAL DEPENDENCE
dc.subject
PRICING TO MARKET
dc.subject
THRESHOLD AUTOREGRESSIVE MODEL
dc.subject
CURRENCY DEPRECIATION
dc.title
Slow Rockets and Fast Feathers or the Link between Exchange Rates and Exports
en
dc.title.subtitle
A Case Study for Pakistan
en
dc.type
Working Paper
en
okr.crossref.title
Slow Rockets and Fast Feathers or the Link between Exchange Rates and Exports: A Case Study for Pakistan
okr.date.disclosure
2020-08-10
okr.doctype
Publications & Research
okr.doctype
Publications & Research :: Policy Research Working Paper
okr.docurl
http://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.googlescholar.linkpresent
yes
okr.identifier.doi
10.1596/1813-9450-9353
okr.identifier.externaldocumentum
090224b087d3d41c_4_0
okr.identifier.internaldocumentum
32312650
okr.identifier.report
WPS9353
okr.imported
true
en
okr.language.supported
en
okr.pdfurl
http://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.pdf
en
okr.region.administrative
South Asia
okr.region.country
Pakistan
okr.statistics.combined
395
okr.statistics.dr
561931597063569779
okr.topic
Finance and Financial Sector Development :: Currencies and Exchange Rates
okr.topic
International Economics and Trade :: Export Competitiveness
okr.unit
Macroeconomics, Trade and Investment Global Practice

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