TY - JOUR
T1 - Currency depreciations and the U.S.-Italian trade balance
T2 - Industry-level estimates
AU - Bahmani-Oskooee, Mohsen
AU - Harvey, Hanafiah
AU - Hegerty, Scott
PY - 2013/9
Y1 - 2013/9
N2 - As one of the indebted Southern European countries that have put pressure on the Euro in recent months, Italy would benefit from a reduction in its external trade deficit. One channel could be through a weakening of its currency-which would only work if the Euro depreciated against the currency of an outside importer, such as the U.S. dollar. This study examines the response of the trade balances of 106 individual industries to such depreciations, using annual data and applying cointegration analysis. We find that only 19 industries register a long-run improvement, with these concentrated in miscellaneous manufactures (SITC sector 8). Two major products in the automotive industry-petroleum and road motor vehicles, show evidence of a ". J-curve" effect.
AB - As one of the indebted Southern European countries that have put pressure on the Euro in recent months, Italy would benefit from a reduction in its external trade deficit. One channel could be through a weakening of its currency-which would only work if the Euro depreciated against the currency of an outside importer, such as the U.S. dollar. This study examines the response of the trade balances of 106 individual industries to such depreciations, using annual data and applying cointegration analysis. We find that only 19 industries register a long-run improvement, with these concentrated in miscellaneous manufactures (SITC sector 8). Two major products in the automotive industry-petroleum and road motor vehicles, show evidence of a ". J-curve" effect.
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U2 - 10.1016/j.rie.2013.04.001
DO - 10.1016/j.rie.2013.04.001
M3 - Article
AN - SCOPUS:84883054063
SN - 1090-9443
VL - 67
SP - 215
EP - 225
JO - Research in Economics
JF - Research in Economics
IS - 3
ER -