Effects of Real Exchange Rate Volatility on Trade: Empirical Analysis of the United States Exports to BRICS
Round 1
Reviewer 1 Report
Referee Report on “Effects of Real Exchange Rate Volatility on Trade: Empirical Analysis of the United States Exports to BRICS Countries”_ jrfm-1561642-peer-review-v1
This study uses the Panel Least Squares, the Panel Fully Modified Least Squares (FMOLS), and Panel Dynamic Least Squares (DOLS) to explore the relationships among the real export, real exchange rate, real foreign income, and exchange rate volatility. In addition, to estimate the short-run and long-run effects of the real exchange rate volatility on exports, it also uses the method of Autoregressive Distributed Lag (ARDL) approach to cointegration analysis and error-correction models. The study also uses two measures of exchange rate volatility. Their results reveal that exports depend positively on the levels of foreign economic activity but negatively on the real exchange rate. However, the exchange rate volatility tends to provide mixed effects in the long-run.
This is an important and interesting issue. The analysis of this paper is rigorous and the results are reasonable. However, I have the following specific concerns.
Major Concerns and Comments:
- In standard time series analysis, authors should first explore the stability of each variable. It is recommended that the authors use the panel unit root test to explore the order of the variables.
- The author's sample period is from 1993 to 2021. During this period, important events such as China's participation in the WTO, the US financial crisis, and the US-China trade war occurred. The authors are advised to check the parametric stability as well as structural changes.
- In addition, the stability analysis of the model, serial correlation and heterogeneity have not been discussed by the author, and it is suggested that they can be properly explained.
- Please check the similarity level of this paper, include reasonable self-cited.
Evaluation:
For the above reasons, I believe this article can be published in this journal with appropriate corrections.
Comments for author File: 
Comments.pdf
Author Response
I have made recommended revisions to the text and the revised sections are highlighted for your information.
Author Response File: Author Response.pdf
Reviewer 2 Report
The work is well designed and the conclusions are clear.
The results have been well analyzed.
The research has its limitations, but the authors described their position rather well. I wish them to continue their research in further articles.
Author Response
I have made recommended revisions to the text and the revised sections are highlighted for your information.
Author Response File: Author Response.pdf
