Exchange Rate Volatility and International Trade

The book examined empirically the effect of exchange rate risk on international trade at various level of disaggregation. The book consists of ten chapters. Chapter 1 presented introduction about the issue of exchange rate risk & trade, brief survey of relevant literature, specific objectives & organization of the study. Chapter 2 estimated the exchange rate risk & checks robustness of the estimated series. Chapter 3 offered the univariate properties of the variables involved & specified the functional form of the model. Chapter 4-7 estimated the effect of exchange rate risk along with other factors on aggregate & bilateral export/import demand for Pakistan with her major trading partners respectively in the long & short run. Chapter 8 conducted same analysis for Pakistan's bilateral sectoral-exports. Chapter 9 summarized the dynamic interactions of exports/imports demands at various levels, with exchange rate risk & other macroeconomic variables concerned. Chapter 10 presented the summary of results, policy implications, limitations of the study & avenue for further research. This study is useful for academic students as well as policy makers for external sector development.