The Impact of Expectations on International Trade: A Panel Data Analysis in the Framework of the Gravity Model

Dublin Core

Title

The Impact of Expectations on International Trade: A Panel Data Analysis in the Framework of the Gravity Model

Author

NUROĞLU, Elif

Abstract

The objective of this paper is to investigate bilateral export flows and its determinants between European countries from 1964 to 1972 and from 1973 to 1998 to show how expectations affect the volume of international trade across European countries. This study extends the gravity model of bilateral trade with population and volatility of exchange rates. It is demonstrated that during fixed exchange rate period volatility in exchange rates has a very large impact on bilateral trade volumes, while the same change causes much lower decrease during floating exchange rate period.

Keywords

Conference or Workshop Item
PeerReviewed

Date

2009-06

Extent

220

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