THE ASYMMETRIC EFFECTS OF EXCHANGE RATE VOLATILITY ON INTERNATIONAL TRADE IN A TRANSITION ECONOMY: THE CASE OF VIETNAM
Abstract
This study examines the asymmetric effects of Exchange Rate Volatility (ERV) on Vietnam’s international trade. Using time-series data fitted to the Nonlinear Autoregressive Distributed Lag (NARDL) model, we find that positive changes in ERV have a negative impact on the trade balance in the short-run. On the other hand,
increases in ERV have a positive impact on the trade balance in the long-run. We also find that negative changes in ERV do not have any significant effect on the trade balance.
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