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The response of industry employment to exchange rate shocks: evidence from panel cointegration

  • Abdulnasser Hatemi-J
  • Manuchehr Irandoust

This study investigates the long-run relationship between employment and exchange rate shocks at the industry level for France. Using panel unit roots and panel cointegration analysis, it is found that the French industries are quite sensitive to exchange rate changes. The estimated long-run elasticities reveal that exchange rates do influence industry employment in the expected way, that is, real appreciations are associated with decline in manufacturing for all industries in the sample.

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Article provided by Taylor & Francis Journals in its journal Applied Economics.

Volume (Year): 38 (2006)
Issue (Month): 4 ()
Pages: 415-421

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Handle: RePEc:taf:applec:v:38:y:2006:i:4:p:415-421
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  1. Imed Drine & Christophe Rault, 2003. "Do panel data permit the rescue of the Balassa-Samuelson hypothesis for Latin American countries?," Applied Economics, Taylor & Francis Journals, vol. 35(3), pages 351-359.
  2. Abdulnasser Hatemi-J & Manuchehr Irandoust, 2004. "Is Pricing to Market Behavior a Long-Run Phenomenon? A Non-Stationary Panel Analysis," Empirica, Springer, vol. 31(1), pages 55-67, March.
  3. Karlsson, Sune & Löthgren, Mickael, 1999. "On the power and interpretation of panel unit root tests," SSE/EFI Working Paper Series in Economics and Finance 299, Stockholm School of Economics.
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  7. Nasri Harb, 2003. "Money Demand Function: A heterogeneous Panel Application," Economics Working Papers 03/04-01, Department of Economics, College of Business and Economics, UAE University.
  8. Dimitris Christopoulos, 2004. "Currency devaluation and output growth: new evidence from panel data analysis," Applied Economics Letters, Taylor & Francis Journals, vol. 11(13), pages 809-813.
  9. William H. Branson & Richard C. Marston, 1989. "Price and Output Adjustment in Japanese Manufacturing," NBER Working Papers 2878, National Bureau of Economic Research, Inc.
  10. Paul R. Krugman & Richard E. Baldwin, 1987. "The Persistence of the U.S. Trade Deficit," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(1), pages 1-56.
  11. Feinberg, Robert M, 1989. "The Effects of Foreign Exchange Movements on U.S. Domestic Prices," The Review of Economics and Statistics, MIT Press, vol. 71(3), pages 505-11, August.
  12. Dekle, Robert, 1998. "The yen and Japanese manufacturing employment," Journal of International Money and Finance, Elsevier, vol. 17(5), pages 785-801, October.
  13. Levin, Andrew & Lin, Chien-Fu & James Chu, Chia-Shang, 2002. "Unit root tests in panel data: asymptotic and finite-sample properties," Journal of Econometrics, Elsevier, vol. 108(1), pages 1-24, May.
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  16. repec:tpr:qjecon:v:110:y:1995:i:4:p:1075-1110 is not listed on IDEAS
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