From the Editor

Dear Readers, Welcome to the fourth issue of The International Trade Journal (ITJ)’s thirty-sixth volume. The articles in this issue focus on exchange rates. The first article examines how aid allocated to increasing trade affects exchange rates. The second article studies how exchange rate volatility affects trade between the United Kingdom and Germany. The third article looks at the asymmetric effect of the exchange rate on Korea’s trade balance with Japan, while the final article looks at how exchange rates affect output in seven countries in Asia. The first article in this issue, by Sena Kimm Gnangnon, asks whether aid that is aimed at expanding trade contributes to Dutch disease in recipient countries. The author finds that in contrast to other types of aid, which result in the exchange rate appreciating, aid intended to expand trade leads to the real exchange rate depreciating. The author argues that this is due to its effect on trade openness, export product diversification, and inward foreign direct investment. The second article, by Mohsen Bahmani-Oskooee and Huseyin Karamelikli, looks at how exchange rate volatility affects trade between the United Kingdom and Germany at the sectoral level. Before allowing for increases and decreases in volatility to affect trade differently, the authors find that increased volatility affects British exports to Germany in 36 of 95 industries in the short run and 23 industries in the long run. Volatility affects German exports to Britain in 42 industries in the short run and 17 in the long run. The effects were stronger when they allowed for increases and decreases in volatility to affect trade asymmetrically. They found short-run effects in 54 British and 64 German exporting industries and long-run effects in 38 British and 42 German exporting industries. The affected industries, however, were mostly small. As a result, exchange rate volatility affected only a small share of UKGermany trade. The third article, by Huseyin Karamelikli and Serdar Ongan, looks at how appreciations and depreciations of the Korean won affect Korea’s trade balance with Japan. Using data on 43 commodities, the authors test whether the long-run and short-run effects are symmetric or asymmetric. Although in