Exchange rate volatility impact on Russia's foreign trade considering EAEU membership

32 Pages Posted: 9 Aug 2022

See all articles by Kniaz Bagdasaryan

Kniaz Bagdasaryan

Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow Campus, Institute of Applied Economic Research

Alexander Abroskin

Gaidar Institute for Economic Policy; Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Moscow Campus

Natalya Abroskina

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Moscow Campus

Alexander Knobel

Gaidar Institute for Economic Policy; Russian Presidential Academy and Public Administration (RANEPA) - Institute of Applied Economic Studies

V. Sedalishchev

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Institute of Applied Economic Research

Sergey Sinelnikov-Murylev

Russian Foreign Trade Academy

Yury Zaitsev

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Moscow Campus

Vadim Zyamalov

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA); Gaidar Institute for Economic Policy

Marina Turuntseva

Gaidar Institute for Economic Policy; Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA)

Date Written: July 26, 2022

Abstract

In this study, we have attempted a broad review of the literature examining the impact of exchange rate volatility on trade volume. We show that early estimates suggesting a significant increase in trade among countries in currency unions are flawed, and are due to a number of reasons related to the endogeneity of the status of currency unions and the presence of trends in regression variables.
One section is devoted to a review of the literature on the general problem of exchange rate effects on trade; it considers an extensive class of models describing consumer demand for imported goods. This is followed by a review of empirical studies that examine, among other things, the difference in the estimation of equations for the "small open economy" and "large open economy" cases. The practical part of the paper assesses the impact of exchange rate volatility on trade volume using panel data for 214 countries of the world, using a proxy variable for the status of currency unions.

Keywords: Eurasian economic union, integration policy, tariff and non-tariff barriers, exchange volatility, international trade, import demand model, Rotterdam demand model, "almost ideal demand model",

JEL Classification: E00, E63, F33, F45

Suggested Citation

Bagdasaryan, Kniaz and Abroskin, Alexander and Abroskina, Natalya and Knobel, Alexander and Sedalishchev, Vladimir and Sinelnikov-Murylev, Sergey and Zaitsev, Yury and Zyamalov, Vadim and Turuntseva, Marina, Exchange rate volatility impact on Russia's foreign trade considering EAEU membership (July 26, 2022). Available at SSRN: https://ssrn.com/abstract=4172791 or http://dx.doi.org/10.2139/ssrn.4172791

Kniaz Bagdasaryan (Contact Author)

Russian Presidential Academy of National Economy and Public Administration (RANEPA), Moscow Campus, Institute of Applied Economic Research ( email )

Prospekt Vernadskogo 84
Moscow, 119606
Russia

Alexander Abroskin

Gaidar Institute for Economic Policy

Gazetny Pereulok, 3-5
Moscow, 125993
Russia

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Moscow Campus ( email )

Moscow, 119571
Russia

Natalya Abroskina

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Moscow Campus ( email )

Moscow, 119571
Russia

Alexander Knobel

Gaidar Institute for Economic Policy ( email )

3-5 Gazetny Lane
Moscow, 125009
Russia

Russian Presidential Academy and Public Administration (RANEPA) - Institute of Applied Economic Studies ( email )

Vernadsky Ave. 82
Moscow, 119571
Russia

Vladimir Sedalishchev

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Institute of Applied Economic Research ( email )

Russia

Sergey Sinelnikov-Murylev

Russian Foreign Trade Academy

Vorob’evskoe shosse, 6A
Moscow, 119285
Russia

Yury Zaitsev

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) - Moscow Campus ( email )

Moscow, 119571
Russia

Vadim Zyamalov

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) ( email )

Vernadskogo Avenue,82
Moscow, Moscow 119571
Russia

Gaidar Institute for Economic Policy ( email )

3-5 Gazetny Lane
Moscow, 125009
Russia

Marina Turuntseva

Gaidar Institute for Economic Policy

Gazetny lane, 3-5
Moscow, 125993
Russia

Russian Academy of National Economy and Public Administration under the President of the Russian Federation (RANEPA) ( email )

Varnadskogo Avenue,82
Moscow, 119571
Russia

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