An economic analysis of the relationship between real exchange rate, price of timber and Malaysian timber export value in three economic crisis / Nur Sarah Ahmad

This paper analyze the relationship of exchange rate, price of export timber and timber export values in three economic crisis : Commodity Shock in 1985-1986, Asian Financial Crisis in 1997-1998 and The Global Financial Crisis in 2008-2009. The estimation results suggest that negative relationship exist between real exchange rate and the export value of timber. In other words, show that if the real exchange rate increases (Malaysian Ringgit Depreciation), this will increase the performance of the timber products and hence encourage export values. While the price of timber affects the performance of timber exports positively in the long run and short run estimation. From the findings of the study can be concluded that appreciating real exchange rate is one of major factors that impede timber export performance. Furthermore, the study also established the efficacy of price increases as a factor for increasing output of timber export. Since three economic crisis has drove many economist researchers in the region including Malaysia to study the impacts of exchange rate and price behavior on international trade flows which Malaysia considered involved in economic openness.