The Real Exchange Rate and US Manufacturing Profits: A Theoretical Framework with Some Empirical Support
AbstractThis paper studies the relationship between the real exchange rate and manufacturing profits using Marston's model of pricing-to-market. Looking at US data, we find that a sustained real depreciation of the dollar has a significant and substantial influence on manufacturing profits. During the early 1980s, the appreciation of the dollar reduced profits by at least 25% conditional on the realized time path of sales, costs, and the US markup. The post-plaza depreciation of the dollar boosted profits at least 30%. Copyright @ 1997 by John Wiley & Sons, Ltd. All rights reserved.
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Bibliographic InfoArticle provided by John Wiley & Sons, Ltd. in its journal International Journal of Finance & Economics.
Volume (Year): 2 (1997)
Issue (Month): 3 (July)
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Web page: http://www.interscience.wiley.com/jpages/1076-9307/
Other versions of this item:
- Richard H. Clarida, 1992. "The real exchange rate and US manufacturing profits: a theoretical framework with some empirical support," Research Paper 9214, Federal Reserve Bank of New York.
- Clarida, R.H., 1992. "The real Exchange Rate and U.S. Manufacturing Profit : A Theoretical Framework with Some Empirical Support," Discussion Papers 1992_28, Columbia University, Department of Economics.
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