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The Long-Run Effects of Depreciation of The Dollar on Sectoral Output

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  • Bahmani-Oskooee Mohsen
  • Mirzaie Aghdas

Abstract

Almost all previous research that investigated the impact of currency depreciation on domestic production relied on an aggregate measure of total output, i.e. GDP. In this paper we investigate the long-run relation between the exchange value of the dollar and production in eight different sectors of the U.S. economy by the means of cointegration analysis. For most sectors we find no evidence of a long-run relation between the value of the dollar and sectoral output. [F31]

Suggested Citation

  • Bahmani-Oskooee Mohsen & Mirzaie Aghdas, 2000. "The Long-Run Effects of Depreciation of The Dollar on Sectoral Output," International Economic Journal, Taylor & Francis Journals, vol. 14(3), pages 51-61.
  • Handle: RePEc:taf:intecj:v:14:y:2000:i:3:p:51-61
    DOI: 10.1080/10168730000000027
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    References listed on IDEAS

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    1. Solimano, Andres, 1986. "Contractionary devaluation in the southern cone : The case of Chile," Journal of Development Economics, Elsevier, vol. 23(1), pages 135-151, September.
    2. Johansen, Soren & Juselius, Katarina, 1990. "Maximum Likelihood Estimation and Inference on Cointegration--With Applications to the Demand for Money," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 52(2), pages 169-210, May.
    3. Carlos F. Diaz Alejandro, 1963. "A Note on the Impact of Devaluation and the Redistributive Effect," Journal of Political Economy, University of Chicago Press, vol. 71, pages 577-577.
    4. Van Wijnbergen, Sweder, 1986. "Exchange rate management and stabilization policies in developing countries," Journal of Development Economics, Elsevier, vol. 23(2), pages 227-247, October.
    5. Edward, Sebastian, 1986. "Are Devaluations Contractionary?," The Review of Economics and Statistics, MIT Press, vol. 68(3), pages 501-508, August.
    6. J. Saul Lizondo & Peter J. Montiel, 1989. "Contractionary Devaluation in Developing Countries: An Analytical Overview," IMF Staff Papers, Palgrave Macmillan, vol. 36(1), pages 182-227, March.
    7. Bahmani-Oskooee, Mohsen, 1996. "The black market exchange rate and demand for money in Iran," Journal of Macroeconomics, Elsevier, vol. 18(1), pages 171-176.
    8. Pierre-Richard Agénor, 1991. "Output, devaluation and the real exchange rate in developing countries," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 127(1), pages 18-41, March.
    9. Glick, Reuven & Hutchison, Michael M, 1990. "Does Exchange Rate Appreciation 'Deindustrialize' the Open Economy? A Critique of U.S. Evidence," Economic Inquiry, Western Economic Association International, vol. 28(1), pages 19-37, January.
    10. Gylfason, Thorvaldur & Risager, Ole, 1984. "Does devaluation improve the current account?," European Economic Review, Elsevier, vol. 25(1), pages 37-64, June.
    11. Bahmani-Oskooee, Mohsen & Payesteh, Sayeed, 1993. "Budget deficits and the value of the dollar: An application of cointegration and error-correction modeling," Journal of Macroeconomics, Elsevier, vol. 15(4), pages 661-677.
    12. Johansen, Soren, 1988. "Statistical analysis of cointegration vectors," Journal of Economic Dynamics and Control, Elsevier, vol. 12(2-3), pages 231-254.
    13. James G. MacKinnon, 1990. "Critical Values for Cointegration Tests," Working Papers 1227, Queen's University, Department of Economics.
    14. Mohsen Bahmani-Oskooee, 1996. "Source of Stagflation in an Oil-Producing Country: Evidence from Iran," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 18(4), pages 609-620, July.
    15. Thorvaldur Gylfason & Michael Schmid, 1983. "Does Devaluation Cause Stagflation?," Canadian Journal of Economics, Canadian Economics Association, vol. 16(4), pages 641-654, November.
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    Cited by:

    1. Mohsen Bahmani-Oskooee & Magda Kandil, 2010. "Exchange Rate Fluctuations and Output in Oil-Producing Countries: The Case of Iran," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 46(3), pages 23-45, May.
    2. Mohsen Bahmani-Oskooee & Ida A. Mirzaie & Ilir Miteza, 2007. "Sectoral Employment, Wages and the Exchange Rate: Evidence from the U.S," Eastern Economic Journal, Eastern Economic Association, vol. 33(1), pages 125-136, Winter.
    3. Mohsen Bahmani-Oskooee & Magda Kandil, 2010. "Exchange Rate Fluctuations and Output in Oil-Producing Countries: The Case of Iran," Emerging Markets Finance and Trade, M.E. Sharpe, Inc., vol. 46(3), pages 23-45, May.

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