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The response of the US export prices to changes in the dollar's effective exchange rate: further evidence from industry level data

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  • Saeid Mahdavi

Abstract

The relationship between the dollar's effective exchange rate and the export price indexes for 13 two-digit US manufacturing industries is analysed to determine (i) which industry adjusts its dollar export price to dampen or amplify the effect of the exchange rate fluctuations on the foreign-currency price of its exports and (ii) whether the response of the export price index to appreciation and depreciation of the exchange rate is asymmetric. For several industries, evidence consistent with dampening the foreign-currency price of exports in an asymmetric fashion is found. The implications of the results for the price competitiveness of the industries studied is discussed.

Suggested Citation

  • Saeid Mahdavi, 2002. "The response of the US export prices to changes in the dollar's effective exchange rate: further evidence from industry level data," Applied Economics, Taylor & Francis Journals, vol. 34(17), pages 2115-2125.
    • Handle: RePEc:taf:applec:v:34:y:2002:i:17:p:2115-2125
    DOI: 10.1080/00036840210135674
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    Cited by:

    1. Musti, Babagana Mala & Siddiki, Jalal Uddin, 2018. "Nonlinear and Asymmetric Exchange Rate Pass-Through to Consumer Prices In Nigeria: Evidence from a Smooth Transition Autoregressive Model," Economics Discussion Papers 2018-3, School of Economics, Kingston University London.
    2. Athukorala, Premachandra & Menon, Jayant, 1994. "Pricing to Market Behaviour and Exchange Rate Pass-Through in Japanese Exports," Economic Journal, Royal Economic Society, vol. 104(423), pages 271-281, March.
    3. Mina Kim, 2016. "Interactions Between Exchange Rates and Import Prices: What Have We Learned?," Annual Report, Globalization and Monetary Policy Institute, Federal Reserve Bank of Dallas, pages 26-31.
    4. Sarah Guillou & Stefano Schiavo, 2010. "Export Prices and Increasing World Competition: Evidence from French, German, and Italian Pricing Behaviour," Chapters, in: Jean-Luc Gaffard & Evens Salies (ed.), Innovation, Economic Growth and the Firm, chapter 10, Edward Elgar Publishing.
    5. Mehmet Balcilar & David Roubaud & Ojonugwa Usman & Mark E. Wohar, 2021. "Testing the asymmetric effects of exchange rate pass‐through in BRICS countries: Does the state of the economy matter?," The World Economy, Wiley Blackwell, vol. 44(1), pages 188-233, January.
    6. Correa, Arnildo da Silva & Minella, André, 2010. "Nonlinear mechanisms of the exchange rate pass-through: A Phillips curve model with threshold for Brazil," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 64(3), September.
    7. Reginaldo P. Nogueira Junior & Miguel Leon-Ledesma, 2008. "Exchange Rate Pass-Through Into Inflation: The Role of Asymmetries and NonLinearities," Studies in Economics 0801, School of Economics, University of Kent.
    8. Jean-Luc Gaffard & Evens Salies (ed.), 2010. "Innovation, Economic Growth and the Firm," Books, Edward Elgar Publishing, number 13101.
    9. repec:hal:wpspec:info:hdl:2441/6123 is not listed on IDEAS
    10. Delatte, Anne-Laure & López-Villavicencio, Antonia, 2012. "Asymmetric exchange rate pass-through: Evidence from major countries," Journal of Macroeconomics, Elsevier, vol. 34(3), pages 833-844.
    11. Roberto Basile & Sergio de Nardis & Alessandro Girardi, 2009. "Pricing to market of Italian exporting firms," Applied Economics, Taylor & Francis Journals, vol. 41(12), pages 1543-1562.
    12. Jiawen Yang, 2007. "Is exchange rate pass-through symmetric? Evidence from US imports," Applied Economics, Taylor & Francis Journals, vol. 39(2), pages 169-178.
    13. repec:spo:wpecon:info:hdl:2441/6123 is not listed on IDEAS
    14. Thi-Ngoc Anh NGUYEN & SATO Kiyotaka, 2018. "Firm Predicted Exchange Rates and Nonlinearities in Pricing-to-Market," Discussion papers 18071, Research Institute of Economy, Trade and Industry (RIETI).
    15. Nguyen, Thi-Ngoc Anh & Sato, Kiyotaka, 2019. "Firm predicted exchange rates and nonlinearities in pricing-to-market," Journal of the Japanese and International Economies, Elsevier, vol. 53(C), pages 1-1.
    16. Amit Ghosh, 2009. "Implications of production sharing on exchange rate pass-through," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 14(4), pages 334-345.
    17. Thi-Ngoc Anh NGUYEN & SATO Kiyotaka, 2015. "Asymmetric Exchange Rate Pass-Through in Japanese Exports: Application of the threshold vector autoregressive model," Discussion papers 15098, Research Institute of Economy, Trade and Industry (RIETI).
    18. Catherine Y. Co, 2007. "Factors That Account for the Large Variations in U.S. Export Prices," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 143(3), pages 557-582, October.
    19. repec:hal:spmain:info:hdl:2441/6123 is not listed on IDEAS
    20. Lavoie, Nathalie & Liu, Qihong, 2004. "Findings Of Pricing-To-Market: Market Segmentation Or Product Differentiation?," 2004 Annual meeting, August 1-4, Denver, CO 20287, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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