Research

This paper examines the bidirectional relationship between dollar-invoiced trade and bilateral global value chain flows using a Two-Stage Least Squares (2SLS) framework. The results suggest a robust negative two-way relationship: greater reliance on dollar invoicing constrains deeper GVC integration, while greater GVC participation can reduce dollar dependence. The findings are also sensitive to exchange rate volatility, underscoring the policy tradeoffs economies face under uncertainty.

This paper investigates how exchange rate fluctuations affect global value chain participation at a disaggregated level, with particular attention to the role of dominant currency invoicing. Using data from 96 countries over 1990-2020, the analysis shows that trade invoiced in dominant currencies is more sensitive to exchange rate movements. Dollar appreciation dampens GVC participation, especially in backward production, while dominant currency invoicing also appears to mitigate some of these negative effects.

This project studies how real exchange rate undervaluation affects labor reallocation between tradable and non-tradable sectors as economies become more integrated into global trade. Using a local projections approach, the paper evaluates how undervaluation and trade integration interact in shaping structural transformation. The goal is to better understand when exchange rate policy and openness reinforce each other in supporting sustainable growth.