Abstract
This paper aims to examine the symmetric and asymmetric effects of third country exchange rate volatility on the trade flow between the US and EU from January 2003 through March 2021. The monthly disaggregated data of the top twelve export and import industries are the sample frame. We find that separating increased volatility from declines and introducing a nonlinear adjustment to the volatility shows a more significant outcome than symmetric analysis. Different industries carry distinctive behaviors regarding exchange rate risk, and the third country effect plays a vital role in trade. Moreover, increased CNY/USD real exchange rate volatility increases bilateral trade between the US and EU.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
