Effects of Real Exchange Rate Volatility on Trade: Empirical Analysis of the United States Exports to BRICS

This paper analyzes the effects of real exchange rate volatility on United States’ exports to BRICS. It focuses top 20 export products (defined by 2-digit Harmonized System codes) from States Brazil, Russia, India, China, and South Africa, uses quarterly data for period 1993Q1 2021Q2. The specified panel regression model was first estimated using three estimation methods, namely, Panel Least Squares, Fully Modified Squares (FMOLS), Dynamic (DOLS). In addition, estimate short-run long-run exports, it also method Autoregressive Distributed Lag (ARDL) approach cointegration analysis error-correction models. Two measures are used in this study. According our findings, levels foreign economic activity have a positive effect while has negative exports. long run all five countries. However, found yield mixed results short regardless which measure used.