Exchange Rate Misalignments Not Sole Cause of Global Trade Imbalances
The study looked at how exchange rate misalignments affect trade imbalances in different countries. By analyzing data from 2000 to 2016, researchers found that while misaligned exchange rates can impact a country's trade balance, the effects are usually small and temporary. Each country responds differently to exchange rate misalignments, so they can't be blamed as the only reason for global trade imbalances.