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This paper explores the effect of exchange rate volatility and of the institutional quality oninternational trade flows of transition economies in Central European Countries by applying agravity model of balance panel between 1999 and 2008. The results show that nominalexchange rate volatility has had a significant negative effect on trade by applying Psuedo-Maximum-Likelihood (PML) estimator method over this period. The institutional qualityneed to be improved in case of size of government and the quality of regulation. The negativeeffect of exchange rate volatility on agricultural exports suggests that joining CentralEuropean Countries to the euro zone can reduce the negative effects of exchange ratevolatility on trade.

Keywords: international trade ; gravity model ; exchange rate volatility ; institutions

Subject(s): International Relations/Trade

Issue Date: 2011

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/114351

Total Pages: 10

Record appears in: European Association of Agricultural Economists (EAAE) > 2011 International Congress, August 30-September 2, 2011, Zurich, Switzerland





Autor: Ferto, Imre ; Fogarasi, Jozsef

Fuente: http://ageconsearch.umn.edu/record/114351?ln=en







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