US Trade and Exchange Rate Volatility: A Real Sectoral Bilateral Analysis

Joseph Byrne, Julia Darby and Ronald MacDonald

Working Papers from Business School - Economics, University of Glasgow

Abstract: In this paper we consider the impact of exchange rate volatility on the volume of bilateral US trade (both exports and imports) using sectoral data. Amongst the novelties in our approach are the use of sectoral industrial price indices, rather than an aggregate price index, and the construction of the sectoral groupings, which is based on economic and econometric criteria. We find that separating trade into differentiated goods and homogeneous goods results in the most appropriate sectoral division, and we also report evidence to suggest that exchange rate volatility has a robust and significantly negative effect across sectors, although it is strongest for exports of differentiated goods.

JEL-codes: F3 (search for similar items in EconPapers)
Date: 2006-10
New Economics Papers: this item is included in nep-cba and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8)

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Related works:
Journal Article: US trade and exchange rate volatility: A real sectoral bilateral analysis (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:gla:glaewp:2006_9

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