Dollar Invoicing, Exchange Rates and International Trade

14 Pages Posted: 6 Apr 2018

See all articles by David E. Cook

David E. Cook

Hong Kong University of Science & Technology (HKUST) - Department of Economics; Hong Kong University of Science & Technology (HKUST) - Department of Economics

Nikhil Patel

Bank for International Settlements (BIS)

Date Written: March 2018

Abstract

This paper studies the role of exchange rates and dollar invoicing in driving the dynamics of international trade flows. It uses a granular decomposition of trade flows at the bilateral level to highlight a bifurcation, whereby in response to a rise in US interest rates, final goods trade between non-US countries, as well as trade that is more regionally oriented, declines by more than does trade that is global value chainoriented. These results highlight an important role played by global value chains in mitigating the negative impact of external shocks.

Full Publication: The Price, Real and Financial Effects of Exchange Rates

Suggested Citation

Cook, David E. and Patel, Nikhil, Dollar Invoicing, Exchange Rates and International Trade (March 2018). BIS Paper No. 96e, Available at SSRN: https://ssrn.com/abstract=3154031

David E. Cook (Contact Author)

Hong Kong University of Science & Technology (HKUST) - Department of Economics ( email )

Clear Water Bay
Kowloon, Hong Kong
China
2538 7614 (Phone)

Hong Kong University of Science & Technology (HKUST) - Department of Economics ( email )

Clear Water Bay
Kowloon, Hong Kong
China
2538 7614 (Phone)

Nikhil Patel

Bank for International Settlements (BIS) ( email )

Centralbahnplatz 2
Basel, Basel-Stadt 4002
Switzerland

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