Effects of exchange rate volatility on exports

Abstract

This paper reviews a part of the most important literature on the impact of exchange rate volatility over exports. The first section reviews particularities and limits in the literature about the connection between the two variables, while the second part reviews the effects of exchange rate volatility over exports volume in different circumstances. Currency depreciation, normally, should stimulate exports, because they become cheaper to foreign products and by contrast, appreciation leads to export decrease. Our main results show that the theorethic area may be contradicted by practical cases.exchange rate; volatility; currency; exports; depreciation; appreciation