We present a model that shows that exchange rate pass-through is likely to be substantially altered when firms face antidumping (AD) duties and that optimal pass-through of AD duties may be up to 200 percent. We examine both pass-through issues using monthly prices across 345 U.S.- imported Canadian iron and steel products from 1989 through 1995, some of which received duties in U.S. AD cases filed in 1992. We find that exchange rate pass-through rise dramatically after products received AD duties, with no such change for closely-related products not subject to final AD duties. This result has important implications for previous studies that have pooled AD and non-AD products. We also find that pass-through of the final AD duties is 160 percent, which is consistent with our model's predictions.
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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number
7378.
Length: Date of creation: Oct 1999 Date of revision: Handle: RePEc:nbr:nberwo:7378
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Find related papers by JEL classification: F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations F31 - International Economics - - International Finance - - - Foreign Exchange
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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.:
Bruce A. Blonigen & Robert C. Feenstra, 1997.
"Protectionist Threats and Foreign Direct Investment,"
NBER Chapters,
in: The Effects of U.S. Trade Protection and Promotion Policies, pages 55-80
National Bureau of Economic Research, Inc.
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