TY - JOUR
T1 - Exchange Rate Uncertainty and Trade between U.S. and Canada
T2 - Is There Evidence of Third-Country Effect?
AU - Bahmani-Oskooee, Mohsen
AU - Bolhassani, Marzieh
N1 - Copyright:
Copyright 2014 Elsevier B.V., All rights reserved.
PY - 2014/1
Y1 - 2014/1
N2 - In a recent article, we assessed the impact of exchange rate uncertainty on the trade flows of 152 industries that trade between the United States and Canada. We found that, in the short run, trade flows of almost two-thirds of the industries were affected by exchange rate uncertainty. However, in the long run, less than one-third of the trade flows were affected. Almost all industries that were affected by exchange rate uncertainty were found to be small, except for road motor vehicles-which make up to 20% of both imports and exports. Exports and imports of this largest industry were adversely affected by exchange rate uncertainty. We wonder how the results will change if we account for the "third-country effect," especially the fluctuation of the U.S. dollar against the currency of the third member of NAFTA, Mexico. We find that, again, in the short run almost two-thirds of the industries are affected by exchange rate uncertainty. However, in the long run, only one-third of the trade flows are affected. The third-country effect seems to be present in the same number of industries, in the short run as well as in the long run.
AB - In a recent article, we assessed the impact of exchange rate uncertainty on the trade flows of 152 industries that trade between the United States and Canada. We found that, in the short run, trade flows of almost two-thirds of the industries were affected by exchange rate uncertainty. However, in the long run, less than one-third of the trade flows were affected. Almost all industries that were affected by exchange rate uncertainty were found to be small, except for road motor vehicles-which make up to 20% of both imports and exports. Exports and imports of this largest industry were adversely affected by exchange rate uncertainty. We wonder how the results will change if we account for the "third-country effect," especially the fluctuation of the U.S. dollar against the currency of the third member of NAFTA, Mexico. We find that, again, in the short run almost two-thirds of the industries are affected by exchange rate uncertainty. However, in the long run, only one-third of the trade flows are affected. The third-country effect seems to be present in the same number of industries, in the short run as well as in the long run.
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U2 - 10.1080/08853908.2014.853589
DO - 10.1080/08853908.2014.853589
M3 - Article
AN - SCOPUS:84891501558
SN - 0885-3908
VL - 28
SP - 23
EP - 44
JO - International Trade Journal
JF - International Trade Journal
IS - 1
ER -