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Nonlinear exchange rate pass-through in timber products: The case of oriented strand board in Canada and the United States

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  • Goodwin, Barry K.
  • Holt, Matthew T.
  • Prestemon, Jeffrey P.

Abstract

We assess exchange rate pass-through (ERPT) for U.S. and Canadian prices for oriented strand board (OSB), a structural wood panel product used extensively in U.S. residential construction. Because of its prominence in construction and international trade, OSB markets are likely sensitive to general economic conditions. In keeping with recent research, we examine regime-specific ERPT effects; we use a smooth transition vector error correction model. We also consider ERPT asymmetries associated with a measure of general macroeconomic activity. Our results indicate that during expansionary periods ERPT is modest, but during downturns, ERPT effects are larger.

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  • Goodwin, Barry K. & Holt, Matthew T. & Prestemon, Jeffrey P., 2019. "Nonlinear exchange rate pass-through in timber products: The case of oriented strand board in Canada and the United States," The North American Journal of Economics and Finance, Elsevier, vol. 50(C).
  • Handle: RePEc:eee:ecofin:v:50:y:2019:i:c:s1062940818303802
    DOI: 10.1016/j.najef.2019.100989
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    3. Guney, Selin, 2015. "An Analysis of the Pass-Through of Exchange Rates in Tropical Forest Product Markets: A Smooth Transition Approach," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 205107, Agricultural and Applied Economics Association.

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    More about this item

    Keywords

    Exchange rate pass-through; Oriented strand board; Smooth transition model; Unemployment rate;
    All these keywords.

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F10 - International Economics - - Trade - - - General
    • F30 - International Economics - - International Finance - - - General
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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