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Exchange Rate Misalignments and International Trade Policy: Impacts on Tariffs

34 Pages Posted: 9 Mar 2012  

Vera Throstensen

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics

Emerson Fernandes Marçal

Sao Paulo School of Economics - FGV; Mackenzie Presbyterian University

Lucas Ferraz

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics

Date Written: November 2011

Abstract

The debate on “exchange wars and trade wars” is raising the attention of experts on international trade and economics. The main purpose of this paper is to analyze the impacts of exchange rate misalignments on one of the most traditional trade policy instruments – tariffs, as defined by the WTO – World Trade Organization. It is divided into three sections: the first one examines the effects of exchange rate variations on tariffs and its consequences for the multilateral trade system; the second explains the methodology used to determine exchange rate misalignments and also presents its results for Brazil, US and China; and the third summarizes the methodology applied to calculate the impacts of exchange rate misalignments on the level of tariff protection through an exercise of “misalignment tariffication".

Keywords: misalignment, exchange rate, tariffs, WTO

JEL Classification: F10, F13

Suggested Citation

Throstensen, Vera and Marçal, Emerson Fernandes and Ferraz, Lucas, Exchange Rate Misalignments and International Trade Policy: Impacts on Tariffs (November 2011). Available at SSRN: https://ssrn.com/abstract=2018554 or http://dx.doi.org/10.2139/ssrn.2018554

Vera Throstensen

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Sao Paulo
Brazil

Emerson Marçal (Contact Author)

Sao Paulo School of Economics - FGV ( email )

Rua Itapeva 286 10 andar
São Paulo, São Paulo 01332-000
Brazil
551137993382 (Phone)

HOME PAGE: http://cemap.fgv.br/en/emerson-marcal-en

Mackenzie Presbyterian University ( email )

Rua da Consolação 920
Sala 213
01302-907 Sao Paulo, São Paulo 010302907
Brazil
55-11-21148268 (Phone)

HOME PAGE: http://www.mackenzie.br/stricto_administracao_empresas.html

Lucas Ferraz

Getulio Vargas Foundation (FGV) - Sao Paulo School of Economics ( email )

Rua Itapeva, 474
Sao Paulo
Brazil

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