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Foreign Currency as a Barrier to International Trade: Evidence from Brazil

Todd Messer

The Review of Economics and Statistics2026https://doi.org/10.1162/rest.a.1707article
AJG 4ABDC A*
Weight
0.50

Abstract

This paper studies the causal effect of foreign currency dependence on international trade by exploiting Brazil and Argentina's 2008 introduction of a bilateral payments system that eliminated the U.S. dollar as vehicle currency. I identify causal effects using a triple-difference design comparing exports across municipalities with varying bank access and across destinations to control for contemporaneous shocks including the financial crisis. Firm-level analysis finds that local currency adoption increased export values significantly, with effects concentrated among non-commodity exporters. These results demonstrate that foreign currency dependence constitutes a meaningful barrier to emerging market trade.

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https://doi.org/https://doi.org/10.1162/rest.a.1707

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@article{todd2026,
  title        = {{Foreign Currency as a Barrier to International Trade: Evidence from Brazil}},
  author       = {Todd Messer},
  journal      = {The Review of Economics and Statistics},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1162/rest.a.1707},
}

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Foreign Currency as a Barrier to International Trade: Evidence from Brazil

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.