Dollar and Exports
Review of Financial Studies, forthcoming
58 Pages Posted: 6 May 2020 Last revised: 6 Dec 2022
There are 2 versions of this paper
Dollar and Exports
Date Written: April 26, 2020
Abstract
The strength of the US dollar has attributes of a barometer of dollar credit conditions, with a stronger dollar associated with tighter dollar credit conditions. Using finely disaggregated data on export shipments, we find that following a dollar appreciation exporters that are more reliant on dollar-funded bank credit for working capital suffer a greater decline in credit and slowdown in exports, including those into the United States. Our findings shed light on the role of the US dollar in the interaction between financial globalization and international trade and show a novel channel of exchange rate transmission that goes in the opposite direction to the competitiveness channel.
JEL Classification: F34, F42, F32, G15
Suggested Citation: Suggested Citation