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Download fileExchange rate hysteresis in the UK imports from the South Asian Countries
journal contribution
posted on 2018-04-09, 15:50 authored by Nusrate Aziz, Ahmad Hassan AhmadAhmad Hassan AhmadWe investigate and find evidence for the hysteresis hypothesis in UK imports from South Asian countries, using a monthly sample of data that covers 1999 to 2012. This paper finds evidence of the asymmetric effect of exchange rate volatility that ‘large’ depreciations significantly reduce UK imports from Bangladesh; however, ‘large’ appreciations do not increase the imports significantly. We also find a partial support for the hysteresis hypothesis in UK imports from India, Pakistan, and Sri Lanka. We find that hysteresis can be both country- and commodity-dependent, which is largely consistent with previous empirical studies. Theoretical literature suggests that hysteresis occurs due to the presence of sunk costs, however, we find that hysteresis occurs even beyond the sunk costs.
History
School
- Business and Economics
Department
- Economics
Published in
International Review of Economics and FinanceCitation
AZIZ, N. and AHMAD, A.H., 2018. Exchange rate hysteresis in the UK imports from the South Asian Countries. International Review of Economics and Finance, 58, pp. 159-178.Publisher
© ElsevierVersion
- AM (Accepted Manuscript)
Publisher statement
This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/Acceptance date
2018-03-21Publication date
2018Notes
This paper was published in the journal International Review of Economics and Finance and the definitive published version is available at https://doi.org/10.1016/j.iref.2018.03.007.ISSN
1059-0560Publisher version
Language
- en