IDEAS home Printed from https://ideas.repec.org/a/fip/fednci/y2007ijunnv.13no.5.html
   My bibliography  Save this article

Why a dollar depreciation may not close the U.S. trade deficit

Author

Listed:
  • Linda S. Goldberg
  • Eleanor Wiske Dillon

Abstract

With the U.S. trade deficit at high levels, many look to a dollar depreciation to curb the U.S. appetite for foreign goods by pushing up the cost of imports. Yet three factors -- the use of the dollar in invoicing U.S. trade, the market share concerns of exporters, and sizable U.S. distribution costs -- could keep U.S. import prices from rising enough to reduce demand significantly. Evidence suggests that a weaker dollar will boost foreign demand for U.S. exports, but this adjustment by itself is unlikely to close the deficit.

Suggested Citation

  • Linda S. Goldberg & Eleanor Wiske Dillon, 2007. "Why a dollar depreciation may not close the U.S. trade deficit," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 13(Jun).
  • Handle: RePEc:fip:fednci:y:2007:i:jun:n:v.13no.5
    as

    Download full text from publisher

    File URL: https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci13-5.html
    Download Restriction: no

    File URL: https://www.newyorkfed.org/medialibrary/media/research/current_issues/ci13-5.pdf
    Download Restriction: no

    Citations

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


    Cited by:

    1. Belloc, Marianna & Federici, Daniela, 2010. "A two-country NATREX model for the euro/dollar," Journal of International Money and Finance, Elsevier, vol. 29(2), pages 315-335, March.
    2. Linda S. Goldberg, 2011. "The international role of the dollar: Does it matter if this changes?," Staff Reports 522, Federal Reserve Bank of New York.
    3. Linda S. Goldberg, 2010. "Is the international role of the dollar changing?," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 16(Jan).
    4. Janet Ceglowski, 2012. "Has global competition changed US export pricing?," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 17(1), pages 1-13, January.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fednci:y:2007:i:jun:n:v.13no.5. 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: (Amy Farber). General contact details of provider: http://edirc.repec.org/data/frbnyus.html .

    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.

    We have no references for this item. You can help adding them by using 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.