Does the Exchange Rate Regime Affect Export Volume? Evidence from Bilateral Exports in Us-Uk Trade : 1900-98

By utilizing the techniques of multivariate cointegration and error correction models, we investigate the impact of the different exchange rate regimes that spanned the twentieth century on the bilateral exports between the UK and the USA over the last 99 years. Our results support two conclusions. First, fixed exchange rate regimes and managed float exchange rate regimes are equally conducive to trade. Second, freely floating exchange rate regimes are more conducive to trade than fixed exchange rate regimes