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Loughborough University Institutional Repository Exchange rate hysteresis in the UK imports from the South Asian Countries
| Content Provider | Semantic Scholar |
|---|---|
| Author | Aziz, Nusrate Ahmad, Abd Hamid |
| Copyright Year | 2019 |
| Abstract | We investigate and find evidence for the hysteresis hypothesis in UK imports from South Asian countries, using a monthly sample of data that covers 1999 to 2012. This paper finds evidence of the asymmetric effect of exchange rate volatility that ‘large’ depreciations significantly reduce UK imports from Bangladesh; however, ‘large’ appreciations do not increase the imports significantly. We also find a partial support for the hysteresis hypothesis in UK imports from India, Pakistan, and Sri Lanka. We find that hysteresis can be both countryand commodity-dependent, which is largely consistent with previous empirical studies. Theoretical literature suggests that hysteresis occurs due to the presence of sunk costs, however, we find that hysteresis occurs even beyond the sunk costs. |
| File Format | PDF HTM / HTML |
| Alternate Webpage(s) | https://dspace.lboro.ac.uk/dspace-jspui/bitstream/2134/32509/1/Hysteresis_Accepted%20Copy.pdf |
| Language | English |
| Access Restriction | Open |
| Content Type | Text |
| Resource Type | Article |
