Impacts of the asymmetric variations of major currencies’ exchange rates on trade: a study based on the GVAR model


ZHANG Huiqing


School of International Economics and Trade, Shanghai Lixin University of Accounting and Finance


Based on the theory of the global value chain, this paper uses a global vector auto-regression model to make an empirical analysis about the impacts of asymmetric variations of major currencies’ exchange rates on the trade of the world’s major economies. The findings reveal that both the appreciation of the US dollar and the depreciation of the Japanese yen have positive effects on China’ s imports and exports, but the depreciation of the euro has negative effects. Therefore, the overall impact on trade after the offsetting of opposite effects is negligible. The asymmetric exchange rate shocks lead to opposite changes of the export competitiveness of the US and that of Japan and the eurozone. The export growth of the eurozone and Japan has a significant crowding-out effect on US exports. Under the co-movement mechanism of the global value chain, most economies in the European production network and East Asian production network have increased foreign trade. However, suffering from the export shrinkage of the US, most economies in the North American production network have decreased foreign trade.


exchange rate variation;import and export;GVAR model;global value chain


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