TY - JOUR
T1 - Currency fluctuations and the French-U.S. trade balance
T2 - Evidence from 118 industries
AU - Bahmani-Oskooee, Mohsen
AU - Harvey, Hanafiah
AU - Hegerty, Scott W.
PY - 2013/5/1
Y1 - 2013/5/1
N2 - The impact of currency depreciations on trade has inspired a large body of research. Recent studies have examined industry-level trade, often using cointegration analysis, finding that a significant fraction of industries respond positively to devaluations. Oftentimes, adjustment lags result in a "J curve" effect, where devaluations hurt the trade balance temporarily. This study examines the specific case of trade between the United States and France, but finds that these flows are less sensitive than has been shown for other country pairs. Only 30 of 118 industries see increased trade balances after a dollar depreciation, and virtually none follow any type of a "J curve." Certain industry sectors are more sensitive than others, however. Examining the SITC classifications of those 30 industries, we find that many of them are clustered in the SITC 700 (Machinery and Transport Equipment) and 800 (Miscellaneous Manufactured Articles) categories. In particular, clothing and footwear, as well as electrical equipment, are particularly affected.
AB - The impact of currency depreciations on trade has inspired a large body of research. Recent studies have examined industry-level trade, often using cointegration analysis, finding that a significant fraction of industries respond positively to devaluations. Oftentimes, adjustment lags result in a "J curve" effect, where devaluations hurt the trade balance temporarily. This study examines the specific case of trade between the United States and France, but finds that these flows are less sensitive than has been shown for other country pairs. Only 30 of 118 industries see increased trade balances after a dollar depreciation, and virtually none follow any type of a "J curve." Certain industry sectors are more sensitive than others, however. Examining the SITC classifications of those 30 industries, we find that many of them are clustered in the SITC 700 (Machinery and Transport Equipment) and 800 (Miscellaneous Manufactured Articles) categories. In particular, clothing and footwear, as well as electrical equipment, are particularly affected.
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U2 - 10.1007/s10663-012-9196-5
DO - 10.1007/s10663-012-9196-5
M3 - Article
AN - SCOPUS:84876964622
SN - 0340-8744
VL - 40
SP - 237
EP - 257
JO - Empirica
JF - Empirica
IS - 2
ER -