Mathematics methods, models and information technologies in economics

Short-term exchange rate elasticity evaluation model for Ukraine’s merchandise exports and imports

Economic Annals-XXI

Economic Annals-ХХI: Volume 141, Issue 5-6, Pages: 101-104

Citation information:
Shumska, S. (2014). Short-term exchange rate elasticity evaluation model for Ukraine’s merchandise exports and imports. Economic Annals-XXI, 5-6, 101-104. https://ea21journal.world/index.php/ea-v141-25/

Svitlana Shumska
PhD (Economics),
Leading Researcher,
Department of Modelling and Forecasting of Economic Development,
Institute for Economics and Forecasting of the National Academy of Sciences of Ukraine
26 P. Myrny Str., Kyiv, 01011, Ukraine
s_shumska@mail.ru

Short-term exchange rate elasticity evaluation model for Ukraine’s merchandise exports and imports

Abstract. This paper presents the results of an empirical study on exchange rate elasticity of merchandise exports and imports of Ukraine. The scientific novelty of the results is that to assess the sensitivity volume of foreign trade flows of change rate in econometric models (one-factor and multi-linear regression equations) were used partial indices of real effective exchange rate (REER), calculated separately for imports and exports. The author presents the results of modelling elasticity estimated for key commodity groups of exports and imports and shows that 41% of exports and 72% of imports of goods during the 2003-2012 years were sensitive to changes in the REER. Calculations showed that the selected time period’s short-rate elasticity of imports of goods is higher than the exchange rate elasticity of exports. With increasing partial indices (respectively, exports and imports) of the real effective exchange rate of hryvnia to 1% for the quarter (strengthening of hryvnia), exports of goods may decline by an average of 4.5 to 6.3%; and imports may increase by 6.9-7.2%. Exchange Rate is not the key among the factors that determine the volume of exports and imports in the short-term period; therefore, more research is needed to other factors in order to get a better picture and justified estimation.

Keywords: Exchange Rate Elasticity of Exports; Exchange Rate Elasticity of Imports; Econometric Model

JEL Classіfіcatіon: C51; F17; F31

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Received 12.04.2014

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