Testing the Short-And-Long-Run Exchange Rate Effects on Trade Balance: The Case of Colombia

Borradores de Economia
Number: 
120
Published: 
Classification JEL: 
C32, C52, E1, F31, F41
Keywords: 
Human capital agglomeration, Social returns, Private returns, Externalities, Uncertainty, Fiscal policy
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This paper examines the role of exchange rates in determining the short-and-long-run trade balance behavior for Colombia. Conventional wisdom says that a nominal devaluation improves the trade balance. This conjecture is rooted in the Bickerdike- Robinson