Bilateral Exchange Rates and Jobs
We study the labor market effects of bilateral exchange rate realignment. We place emphasis on the composition of trade, the role of intermediates, and the underlying conditions of the labor market. Employment effects hinge on the fraction exported to and imported from the trading partner. A larger fraction exported to and a smaller fraction imported from the trading partner make it more likely that appreciation has beneficial effects. Furthermore, more sticky price expectations in wage formation, a smaller fraction of intermediates in the production process, and a lower rate of importer pass through make it more likely that appreciation of the exchange rate of the trade partner has positive employment effects. At a more technical level, the scope for substitution away from higher priced inputs, either toward other sources of supply, or toward value added, is also important to the direction and magnitude of changes in employment.
|Date of creation:||Jan 2012|
|Date of revision:|
|Contact details of provider:|| Fax: +43 732-2468-8238|
Web page: http://www.econ.jku.at/
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Sweder van Wijnbergen, 1986.
"Exchange Rate Management and Stabilization Policies in Developing Countries,"
in: Economic Adjustment and Exchange Rates in Developing Countries, pages 17-42
National Bureau of Economic Research, Inc.
- 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.
- N. Gregory Mankiw & Ricardo Reis, 2010.
"Imperfect Information and Aggregate Supply,"
0910-11, Columbia University, Department of Economics.
- Ray C. Fair, 2010. "Estimated Macroeconomic Effects of a Chinese Yuan Appreciation," Cowles Foundation Discussion Papers 1755, Cowles Foundation for Research in Economics, Yale University.
- Edward, Sebastian, 1986.
"Are Devaluations Contractionary?,"
The Review of Economics and Statistics,
MIT Press, vol. 68(3), pages 501-08, August.
- repec:cup:cbooks:9780521589970 is not listed on IDEAS
- Martin Bodenstein & Christopher J. Erceg & Luca Guerrieri, 2009.
"The effects of foreign shocks when interest rates are at zero,"
International Finance Discussion Papers
983, Board of Governors of the Federal Reserve System (U.S.).
- Bodenstein, Martin & Erceg, Christopher & Guerrieri, Luca, 2010. "The Effects of Foreign Shocks When Interest Rates Are at Zero," CEPR Discussion Papers 8006, C.E.P.R. Discussion Papers.
- Frank Smets & Raf Wouters, 2002.
"An estimated dynamic stochastic general equilibrium model of the euro area,"
Working Paper Research
35, National Bank of Belgium.
- Frank Smets & Raf Wouters, 2003. "An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1123-1175, 09.
- Christopher J. Erceg & Luca Guerrieri & Christopher Gust, 2006.
"SIGMA: a new open economy model for policy analysis,"
International Finance Discussion Papers
835, Board of Governors of the Federal Reserve System (U.S.).
- Christopher J. Erceg & Luca Guerrieri & Christopher Gust, 2006. "SIGMA: A New Open Economy Model for Policy Analysis," International Journal of Central Banking, International Journal of Central Banking, vol. 2(1), March.
- Erceg, Christopher & Guerriei, Luca & Gust, Christopher, 2006. "SIGMA: A New Open Economy Model for Policy Analysis," MPRA Paper 813, University Library of Munich, Germany.
- Christopher S. P. Magee & Stephen P. Magee, 2008. "The United States is a Small Country in World Trade," Review of International Economics, Wiley Blackwell, vol. 16(5), pages 990-1004, November.
- P. Krugman & L. Taylor, 1976.
"Contractionary Effects of Devaluations,"
191, Massachusetts Institute of Technology (MIT), Department of Economics.
- Ray C Fair, 2010. "Estimated Macroeconomic Effects of a Chinese Yuan Appreciation," Business Economics, Palgrave Macmillan, vol. 45(4), pages 233-243, October.
When requesting a correction, please mention this item's handle: RePEc:jku:econwp:2012_02. 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: (Ren� B�heim)
If references are entirely missing, you can add them using this form.