Resource title

The Effects of the Real Exchange Rate Volatility and Misalignments on Foreign Trade Flows in Uzbekistan

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Resource description

This study documents a quantitative analysis of exchange rate volatilities and misalignment in Uzbekistan for the period of 1994q3 2005q2. The results suggest that the real exchange rate volatility and misalignment have depressing effects on the volume of trade, mainly exports in Uzbekistan. The Government's currency rationing policy was lessening the volatility proving that the policy-induced changes in exchange rate has a stabilizing effect on trade flows. The implied elasticity for the most significant real exchange rate volatility coefficient is 0.20. Using a two-step Engle-Granger technique import demand and export supply price elasticities are computed. The results are consistent with the predictions from a number of previous studies, and in particular, the estimated exports price elasticity for Uzbek economy ranges from 1.65 to 1.84, while import demand price elasticity is between 0.78 and 0.83. At the same time, relatively lower elasticity during the currency rationing period indicate that large devaluations, most likely, did not generate the expected improvements in the overall export performance.

Resource author

Ulugbek Olimov, Nishanbay Sirajiddinov

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/27465

Resource license

Adapt according to the presented license agreement and reference the original author.