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Why You Should Use High-Frequency Data to Test the Impact of Exchange Rate on Trade

  • Karam Shaar
  • Mohammed Khaled
Conference paper
Part of the Springer Proceedings in Business and Economics book series (SPBE)

Abstract

This study suggests that testing the impact of exchange rate on trade should be done using high-frequency data. Using different data frequencies for identical periods and specifications between the USA and Canada, we show that low-frequency data might suppress and distort the evidence of the impact of exchange rate on trade in the short run and the long run.

Keywords

Data frequency Exchange rate and trade J-curve theory ARDL cointegration US-Canada trade 

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Copyright information

© Springer International Publishing AG, part of Springer Nature 2018

Authors and Affiliations

  1. 1.School of Economics and Finance, Victoria University of WellingtonWellingtonNew Zealand

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