The Effects Of The Exchange Rate On Foreign Trade Performance In Countries With Foreign Trade Deficit

Exchange rates have become increasingly important as the rise of free trade has been supported by globalization and technological developments. In flexible exchange rate systems, is expected to affect volume foreign thus aggregate output. this context, it understand relationship between in economic policy implementation. The aim study contribute literature comparatively analyzing volumes selected countries. Accordingly, real effective (REER) import export eight countries with largest deficits 2020 (USA, UK, India, France, Turkiye, Egypt, Philippines, Pakistan) estimated using monthly data for period January 2003–January 2022. By including REER a proxy analysis, domestic prices trading countries, which are determinants trade, also considered. heterogeneous structure horizontal cross-sectional dependence series taken into account choice analysis method. new generation econometric methods compatible characteristics series, CADF CIPS unit root tests followed Westerlund's (2008) Durbin-Hausman Cointegration Test, then Pesaran's (2006) Common Correlated Effects (CCE) Estimator Emirmahmutoglu Kose's (2011) Panel Causality Test applied.The findings listed follows. According results cointegration test, was found all included analysis. Then, long-run coefficients models were estimated. CCE estimation results, negatively affected long run, while positively each other. Fisher test statistics there bidirectional causality REER. short run indicates that interaction variables cyclical.