Industry-Specific Exchange Rates for the United States

Federal Reserve Bank of New York Economic Policy Review, Vol. 10, No. 1, May 2004

16 Pages Posted: 28 Sep 2004

See all articles by Linda S. Goldberg

Linda S. Goldberg

Federal Reserve Bank of New York; National Bureau of Economic Research (NBER)

Abstract

The trade-weighted exchange rates constructed for the aggregate U.S. economy do not always capture the changes in industry competitive conditions induced by movements in specific bilateral exchange rates. Exchange rates produced using information on industry-specific trade partners are often better suited for this task. This article constructs three industry-specific real exchange rate measures for the United States-one using export partner weights only, a second using import partner weights, and a third using an average of export and import weights by industry - and examines how they co-move or diverge from the aggregate economywide measures. The exercise suggests that researchers who use aggregate exchange rate indexes rather than industry-specific measures might overlook the empirical value of exchange rates for the producer profits of specific U.S. industries.

Keywords: exchange rate, dollar, industry, competition, import, prices

JEL Classification: F3, F4

Suggested Citation

Goldberg, Linda S., Industry-Specific Exchange Rates for the United States. Federal Reserve Bank of New York Economic Policy Review, Vol. 10, No. 1, May 2004. Available at SSRN: https://ssrn.com/abstract=596901

Linda S. Goldberg (Contact Author)

Federal Reserve Bank of New York ( email )

33 Liberty Street
New York, NY 10045
United States
212-720-2836 (Phone)
212-720-6831 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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