Nevila Mehmetaj – University of Shkodra Luigj Gurakuqi; rr. Dasho Shkreli, Albania

Keywords:                            Exchange rate;
Trade balance;


Abstract:This study attempts to identify the relationship between the real exchange rate and trade balance in Albania with its major trading partner Italy. Due to the severe lockdown and restrictions policies in re­sponse to Covid-19 measures, there were important effects on the evolu­tion of trade. Quarterly data from 2008 to 2022 are used in several econo­metric methods such as unit root tests, cointegration techniques, Grang­er test, and vector error correction model (VECM). The main findings of this study are that domestic income and exchange rate show a long-run pos­itive relationship to the trade balances. Devaluation of the domestic cur­rency will improve the trade balance in the long run, consistent with the Marshall-Lerner condition.

8th International Scientific ERAZ Conference – ERAZ 2022 – Conference Proceedings: KNOWLEDGE BASED SUSTAINABLE DEVELOPMENT, Online-Virtual (Prague, Czech Republic), May 26, 2022

ERAZ Conference Proceedings published by: Association of Economists and Managers of the Balkans – Belgrade, Serbia

ERAZ conference partners: Faculty of Economics and Business, Mediterranean University, Montenegro; University of National and World Economy – Sofia, Bulgaria; Faculty of Commercial and Business Studies – Celje, Slovenia; AMBIS University, Prague – Czech Republic; Faculty of Applied Management, Economics and Finance – Belgrade, Serbia

ERAZ Conference 2022 Conference Proceedings: ISBN 978-86-80194-60-8, ISSN 2683-5568, DOI:

Creative Commons Non Commercial CC BY-NC: This article is distributed under the terms of the Creative Commons Attribution-Non-Commercial 4.0 License ( which permits non-commercial use, reproduction and distribution of the work without further permission. 

Sugested citation

Mehmetaj, N. (2022). Relationship between Exchange Rate and Trade Balance Pre and after COVID-19 – Albania Case Study. In V. Bevanda (Ed.), ERAZ Conference – Knowlegde Based Sustainable Development: Vol 8. Conference Proceedings (pp. 23-30). Association of Economists and Managers of the Balkans.


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