We argue that a transaction tax is likely to amplify, not dampen, volatility in the foreign exchange markets. Our … trades disproportionately, leading to increased volatility. Empirical support for this prediction is found by investigating … the effect of transaction costs on the volatility of DEM/USD and JPY/USD returns. High-frequency data are used and an …

"Despite the common view that exchange rate volatility will inevitably depress the volume of international trade by … empirically investigate the impact of exchange rate volatility on real international trade flows, but with a much broader … perspective and an improved measure of volatility. Our 18-country data set consists of bilateral real exports for the period 1980 …

We study whether the accuracy of news announcements matters for the impact of news on exchange rate volatility. We use … precise news increases volatility significantly more than imprecise news. Also, news on indicators that are in general more … precise increase volatility more than news on typically imprecise indicators. Finally, we use real time data to measure the …

on the volatility of bilateral trade flows. A one standard deviation increase in exchange rate uncertainty leads to an … eight per cent increase in trade volatility. These effects differ markedly for trade flows between industrialized countries …

In this paper, we empirically investigate the impact of exchange rate volatility on real international trade flows … volatility from the intra--monthly variations in the exchange rate to better quantify this latent variable. We find that the … effect of exchange rate volatility on trade flows is nonlinear, depending on its interaction with the importing country …

We present an empirical investigation of the hypotheses that exchange rate volatility may have an impact on both the … findings that exchange rate volatility has a consistent positive and significant effect on the volatility of bilateral trade … flows, helping us better understand macroeconomic volatility. …

This paper investigates empirically the effect of real exchange rate volatility on sectoral bilateral trade flows … arise through changes in income volatility and the interaction between income and exchange rate volatilities. We provide … evidence that exchange rate volatility mainly affects sectoral trade flows of developing but not that of developed countries …