Protectionism, bilateral integration, and the cross section of exchange rate returns in US presidential debates

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Contributors

Abstract

We study the impact of US presidential election TV debates on the cross section of intraday exchange rate returns of 96 currencies from 1996 to 2016. The performance of the candidates in the debate is an exogenous shock to the election probability. We find that currencies of countries with high levels of bilateral foreign trade with the US depreciate if the election probability of the protectionist candidate increases during the debate, while no significant impact is detected for countries with bilateral US exports to GDP below 2 percent. Expectations about protectionist measures are the main transmission channel of debate outcomes, while the candidates' stance towards military and immigration play a minor role.

Details

Original languageEnglish
Article number103134
JournalJournal of international money and finance
Volume147
Publication statusPublished - Sept 2024
Peer-reviewedYes

Keywords

Sustainable Development Goals

ASJC Scopus subject areas

Keywords

  • Bilateral trade integration, Exchange rates, Protectionism, TV debates, US presidential elections