Exchange Rate Appreciation and Export Price Competitiveness: Industry-specific real effective exchange rates of Japan, Korea, and China
This paper constructs a new data set of the industry-specific real effective exchange rate (REER), based on the producer price indices, of the Japanese yen, Korean won, and Chinese renminbi on a daily basis from 2005 to the present in order to provide a better indicator for the international price competitiveness of the three countries. We show a large difference in the level of REER not only between the countries but also across industries. By conducting factor decomposition analysis of industry-specific REER, it is revealed that a substantial fall in domestic producer prices during the won appreciation period has enhanced Korean firms' export competitiveness compared to Japanese firms, especially in the electrical machinery industry. In contrast, Japanese automobile firms do not lose export competitiveness with respect to their Korean counterparts, due to the relative decline of domestic production costs.
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- Fernando Alexandre & Pedro Bação & João Cerejeira & Miguel Portela, 2009.
"Aggregate and sector-specific exchange rate indexes for the Portuguese economy,"
0016, Gabinete de Estratégia e Estudos, Ministério da Economia e da Inovação, revised May 2009.
- Fernando Alexandre & Pedro Bação & João Cerejeira & Miguel Portela, 2009. "Aggregate and sector-specific exchange rate indexes for the Portuguese economy," Notas Económicas, Faculdade de Economia, Universidade de Coimbra, issue 30, pages 6-28, December.
- Fernando Alexandre & Pedro Bação & João Cerejeira & Miguel Portela, 2009. "Aggregate and sector-specific exchange rate indexes for the Portuguese economy," GEMF Working Papers 2009-05, GEMF - Faculdade de Economia, Universidade de Coimbra.
- Fernando Alexandre & Pedro Bação & João Cerejeira & Miguel Portela, 2009. "Aggregate and sector-specific exchange rate indexes for the Portuguese economy," NIPE Working Papers 13/2009, NIPE - Universidade do Minho.
- Ceglowski, Janet, 2010. "Has pass-through to export prices risen? Evidence for Japan," Journal of the Japanese and International Economies, Elsevier, vol. 24(1), pages 86-98, March.
- Campa, José Manuel & Goldberg, Linda S., 2004.
"Exchange Rate Pass-Through into Import Prices,"
CEPR Discussion Papers
4391, C.E.P.R. Discussion Papers.
- Andre Varella Mollick, 2009. "Crisis and Volatility in Asian Versus Latin American Real Exchange Rates," Economie Internationale, CEPII research center, issue 117, pages 5-29.
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