원/위안 환율변동 불확실성과 한국과 중국의 무역

won/yuan Exchange Rate Uncertainty and Bilateral Trade between Korea and China

Using the newly developed ARDL Bounds cointegration testing framework, the effect of Korean won-Chinese yuan exchange rate uncertainty on bilateral trade flow between Korea and China is examined. The data span is from 1991Q1 to 2008Q4. The long-run equilibrium relationship exists between trade flow and its determinants; income, real exchange rate, uncertainty of exchange rate change. In the long-run, exchange rate uncertainty has a negative effects on both export and import. An increase of the uncertainty deters Korean export to China, but Korean import from China is not affected by the uncertainty in the short-run adjustment. Exchange rate stabilization policy could help to increase trade flows between both countries.