Table of Contents
ISRN Economics
Volume 2014, Article ID 839380, 10 pages
Research Article

Exchange Rate Volatility and Aggregate Exports: Evidence from Two Small Countries

1Department of International Trade, Technological Institute of Western Macedonia Kastoria Campus, 52100 Kastoria, Greece
2Adjunct Faculty, Hellenic Open University, Greece

Received 30 October 2013; Accepted 27 November 2013; Published 20 January 2014

Academic Editors: J. M. Labeaga and K. P. Upadhyaya

Copyright © 2014 Dimitrios Serenis and Nicholas Tsounis. This is an open access article distributed under the Creative Commons Attribution License, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.


This paper examines the effect of exchange rate volatility for two small countries, Croatia and Cyprus, on aggregate exports during the period of first quarter of 1990 to first quarter of 2012. It is claimed by some researchers that exchange rate volatility causes a reduction on the overall level of trade. Empirical researchers often utilize the standard deviation of the moving average of the logarithm of the exchange rate as a measure of exchange rate fluctuation. In this study, we propose a new measure for volatility. Overall, our results suggest that there is a positive effect of volatility on exports of Croatia and Cyprus.