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dc.titleThe Causal Effects of Expected Depreciations
dc.contributor.authorDelgado, Martha Elena
dc.contributor.authorHerreño, Juan David
dc.contributor.authorHofstetter, Marc
dc.contributor.authorPedemonte, Mathieu
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageLatin America
dc.date.available2024-10-08T00:10:00
dc.date.issue2024-10-08T00:10:00
dc.description.abstractWe estimate the causal effects of a shift in the future expected exchange rate of a local currency against the US dollar on a representative sample of firms in a small open economy. We survey a nationally representative sample of firms and provide the one-year-ahead nominal exchange rate forecast published by the local central bank to a random sub-sample of firm managers. This information treatment is effective in shifting exchange rate expectations and perceptions. These effects are persistent and larger for non-exporting firms. Linking survey responses with administrative census data, we estimate a positive elasticity of current import expenditures to a future expected depreciation. Our estimates highlight the intertemporal margin of trade to anticipated changes in trade costs.
dc.format.extent67
dc.identifier.doihttp://dx.doi.org/10.18235/0013188
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/the-causal-effects-of-expected-depreciations.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectSmall Business
dc.subjectExchange Rate
dc.subjectInflation
dc.subjectEconomy
dc.subjectExport
dc.subjectInflation Targeting
dc.subjectImport
dc.subject.jelcodeE31 - Price Level • Inflation • Deflation
dc.subject.jelcodeE71 - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on the Macro Economy
dc.subject.jelcodeF31 - Foreign Exchange
dc.subject.jelcodeG41 - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making in Financial Markets
dc.subject.keywordsExpectations;exchange rate;Firms;Trade
idb.identifier.pubnumberIDB-WP-01637
idb.operationRG-K1089
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