Money Talks, What’s The Story?




Painter, Brandon

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The purpose of this research is to analyze the relationship between a country’s currency and their total imports and exports. Theoretically, a currency’s flotation in value will influence the net imports or exports for the related nation. A currency that is appreciating in relation to others will cause more foreign purchases, and therefore, an increase in imports and a relative decrease in exports. To analyze this, the currency exchange rate data and international trade data for the corresponding twenty-one nations, for the past seventeen years, was mathematically and graphically examined. When analyzed, the correlation coefficients for the net exports and exchange rates extended from -.896 to +.945. This wide range would generally reflect a weak or non-extant relationship, however, some correlations appeared to be tarnished by different external environmental factors. With further analysis, deviations from a positive correlation could be partially justified. Based upon this research, no definitive conclusion can be made on the validity of the exchange rate and net export relationship.



Money, Currency, exchange rate, export, international trade, Research Subject Categories::SOCIAL SCIENCES::Business and economics::Economics, Research Subject Categories::SOCIAL SCIENCES::Business and economics::Economics::Econometrics