Advanced Search
MyIDEAS: Login to save this article or follow this journal

Currency Appreciation and ‘Deindustrialisation’: A European Perspective

Contents:

Author Info

  • John A. Tatom

Abstract

During the 1980s, policy advisers were successful in promoting the view that movements in the value of the dollar have an inverse relationship to U.S. international competitiveness. This article explains their hypothesis, as well as the counterargument that exchange rates positively reflect a country's competitiveness. Economic policies that boost competitiveness also raise the value of the domestic currency. The mirror image of these hypotheses apply to U.S. trading partners, including Europe. The evidence indicates that European countries were not "deindustralized" from 1985 to 1990, when the ECU rose in value by more than the dollar had risen in 1980-1985. Instead, European competitiveness rebounded strongly in the late-1980s, reversing the stagnant performance of the early-1980s. Similarly, during the early-1980s, when the United States was, on one unsupported view, deindustralizing, European nations generally did not enjoy a surge in their share of output or capital formation. Instead, they suffered from "Euroscierosis".

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://hdl.handle.net/10.1111/j.1467-9701.1995.tb00229.x
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Wiley Blackwell in its journal The World Economy.

Volume (Year): 18 (1995)
Issue (Month): 4 (07)
Pages: 519-541

as in new window
Handle: RePEc:bla:worlde:v:18:y:1995:i:4:p:519-541

Contact details of provider:
Web page: http://www.blackwellpublishing.com/journal.asp?ref=0378-5920

Order Information:
Web: http://www.blackwellpublishing.com/subs.asp?ref=0378-5920

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Glick, Reuven & Hutchison, Michael M, 1990. "Does Exchange Rate Appreciation 'Deindustrialize' the Open Economy? A Critique of U.S. Evidence," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 28(1), pages 19-37, January.
  2. Koester, Reinhard B & Kormendi, Roger C, 1989. "Taxation, Aggregate Activity and Economic Growth: Cross-Country Evidence on Some Supply-Side Hypotheses," Economic Inquiry, Western Economic Association International, Western Economic Association International, vol. 27(3), pages 367-86, July.
  3. Robert Z. Lawrence, 1983. "Is Trade Deindustrializing America? A Medium-Term Perspective," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 14(1), pages 129-172.
  4. Stockman, Alan C. & Svensson, Lars E. O., 1987. "Capital flows, investment, and exchange rates," Journal of Monetary Economics, Elsevier, Elsevier, vol. 19(2), pages 171-201, March.
  5. Stephen A. Meyer, 1986. "Trade deficits and the dollar: a macroeconomic perspective," Business Review, Federal Reserve Bank of Philadelphia, Federal Reserve Bank of Philadelphia, issue Sep, pages 15-25.
  6. Heinz Gluck & Dieter Proske & John A. Tatom, 1992. "Monetary and exchange rate policy in Austria: an early example of policy coordination," Working Papers, Federal Reserve Bank of St. Louis 1992-005, Federal Reserve Bank of St. Louis.
  7. William H. Branson, 1986. "The Limits of Monetary Coordination As Exchange Rate Policy," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 17(1), pages 175-194.
  8. Georg Winckler, 1991. "Exchange Rate Appreciation As a Signal of a New Policy Stance," IMF Working Papers 91/32, International Monetary Fund.
  9. Robert Solomon, 1985. "Effects of the strong dollar," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, Federal Reserve Bank of Kansas City, pages 65-92.
  10. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 72, pages 584.
  11. Razin, Assaf, 1984. "Capital movements, intersectoral resource shifts and the trade balance," European Economic Review, Elsevier, Elsevier, vol. 26(1-2), pages 135-152.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Feridun, M. & Isola, W.A., 2005. "Market Driven Reforms and the Structural Characteristics of Employment in Nigeria: An Econometric Analysis, 1986-2003," Applied Econometrics and International Development, Euro-American Association of Economic Development, Euro-American Association of Economic Development, vol. 5(1).
  2. Frait , Jan & Komárek, Luboš, 2001. "REAL Exchange rate trends in transitional countries," The Warwick Economics Research Paper Series (TWERPS), University of Warwick, Department of Economics 596, University of Warwick, Department of Economics.
  3. Vlaar, Peter J.G., 2007. "GDP growth and currency valuation: The case of the dollar," Journal of International Money and Finance, Elsevier, Elsevier, vol. 26(8), pages 1424-1449, December.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:bla:worlde:v:18:y:1995:i:4:p:519-541. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.