Several, recent empirical studies have shown
that exchange rate volatility has a negative impact on the volume of international
trade and on foreign direct investment. However, in open economies, all economic
variables are affected by conditions relating to international integration. A
study by the CEPII has therefore tried to show how exchange rate volatility may
penalise domestic investment. Such an effect is all the more pronounced the more
similar the productive structures of the involved countries are. These diverse
studies thus provide new arguments relating to the choice of a monetary peg, underlying
the necessity of a good matching between trade and monetary zones.
