An International Comparison of Employment Adjustment to Exchange Rate Fluctuations

27 Pages Posted: 13 Jul 2000 Last revised: 4 Oct 2010

See all articles by Simon M. Burgess

Simon M. Burgess

University of Bristol - Department of Economics; University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Michael M. Knetter

University of Wisconsin - Madison - School of Business; National Bureau of Economic Research (NBER)

Multiple version iconThere are 2 versions of this paper

Date Written: December 1996

Abstract

This paper evaluates the response of employment to exchange rate shocks at the industry level for the G-7 countries. Using a simple empirical framework that places little a priori structure on the pattern of response to shocks, we find the data are consistent with the view that employment in European industries, at least France and Germany, is much less influenced by exchange rate shocks and much slower to adjust to long run steady states. The United States, Japan, Canada, the United Kingdom and Italy all appear to adjust more quickly. German and Japanese employment are quite insensitive to exchange rate fluctuations, consistent with previous research on output and markup responses to exchange rates.

Suggested Citation

Burgess, Simon and Knetter, Michael M., An International Comparison of Employment Adjustment to Exchange Rate Fluctuations (December 1996). NBER Working Paper No. w5861. Available at SSRN: https://ssrn.com/abstract=225646

Simon Burgess (Contact Author)

University of Bristol - Department of Economics ( email )

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HOME PAGE: http://www.bris.ac.uk/Depts/Economics/department/profiles/burgess.htm

University of Bristol - Leverhulme Centre for Market and Public Organisation (CMPO)

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Bristol BS8 1TN
United Kingdom

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Michael M. Knetter

University of Wisconsin - Madison - School of Business ( email )

975 University Avenue
Madison, WI 53706
United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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