Business cycles, stylized facts, and the exchange rate regime: evidence from the United States

Capital reallocation is procyclical, despite measured productive reallocative opportunities being acyclical or even countercyclical. This article reviews the advances in the literature studying the causes and consequences of capital reallocation (or lack thereof). We provide a comprehensive set of stylized facts about capital reallocation for the United States and an illustrative model of capital reallocation in equilibrium. We relate capital reallocation to the broader literatures on business cycles with financial frictions and on resource misallocation and aggregate productivity. Throughout, we provide directions for future research.

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U.S.-China Exchange Rate Negotiation: Stakeholders' Participation and Strategy Deployment

Business and Politics ◽

10.2202/1469-3569.1368 ◽

2011 ◽

Vol 13 (3) ◽

pp. 1-23 ◽

Cited By ~ 2

Author(s):

Emily Yixuan Cao ◽

Yong Cao ◽

Rashmi Prasad ◽

Zhengping Shen

Keyword(s):

United States ◽

Exchange Rate ◽

Exchange Rates ◽

Domestic Politics ◽

Historical Review ◽

The United States ◽

Negotiation Strategy ◽

Negotiation Strategies ◽

The Exchange Rate ◽

The U.S

Exchange rates influence a country's trading capability, foreign reserves and competitiveness. Recently, the exchange rate between the Chinese RMB and the U.S. dollar has been a contentious issue in both the United States and China. In this paper, we conduct a historical review of how the United States deployed negotiation strategies with China on the exchange rate issue and consider the degree to which it follows theoretical expectations. We then analyze the changing nature of the factors which shape exchange rate negotiations between the two nations in projecting alternative scenarios for the future of conflict resolution between the U.S. and China on this issue. We predict that the U.S. is likely to continue alternating between competition and collaboration, a negotiation cycle influenced by U.S. domestic politics, and China is less likely to continue with accommodation and compromise. The sequencing and timing of each nation's negotiation strategy will lead to widely divergent consequences for the management of exchange rates and the world economy.

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A NEW MEASURE TO QUANTIFY HYSTERESIS LOSSES: THE CASE OF ITALIAN WINE EXPORTS TO THE UNITED STATES

Macroeconomic Dynamics ◽

10.1017/s1365100517000967 ◽

2018 ◽

Vol 23 (07) ◽

pp. 2787-2814 ◽

Cited By ~ 1

Author(s):

Jolita Adamonis ◽

Laura M. Werner

Keyword(s):

United States ◽

Exchange Rate ◽

Standard Procedure ◽

Adjustment Costs ◽

The United States ◽

Continuous Increase ◽

Hysteresis Losses ◽

Exporting Firms ◽

Italian Wine ◽

The Exchange Rate

This paper introduces a new measure to capture dynamic losses for exporting firms on markets that exhibit hysteresis on the supply side. Our indicator aims to quantify dynamic losses caused by sunk adjustment costs in case of exchange rate fluctuations. While the standard procedure in welfare analysis is to compare two equilibria, we focus on welfare effects that take place during dynamics. We analyze negative dynamic effects on producers' income that are generated due to writing off sunk adjustment costs. As an example, we investigate Italian wine exports to the United States over the period 1995–2013. After testing for hysteresis on the market, we present the indicator of hysteresis losses. It captures a continuous increase of dynamic losses during the period 2003–2008. Moreover, over-proportionately large hysteresis losses are generated in comparison to the exchange rate changes if the pain threshold of the exchange rate (ca. 1.25$/€) is passed.

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Analsis determinan yang mempengaruhi perdagangan luar negeri Indonesa terhadap dua negara yang terlibat perang dagang Amerika Serikat VS China

Jurnal Paradigma Ekonomika ◽

10.22437/jpe.v16i3.14342 ◽

2021 ◽

Vol 16 (3) ◽

pp. 471-486

Author(s):

Emilia Emilia ◽

Adi Bhakti ◽

Candra Mustika

Keyword(s):

United States ◽

Exchange Rate ◽

Labor Force ◽

Positive Impact ◽

The United States ◽

Significant Negative Effect ◽

Population Variable ◽

Negative Effect ◽

The Exchange Rate

The purpose of this study is to analyze how Indonesia's exports and imports compared to the United States and China and to investigate how the exchange rate, labor force, and population influence Indonesia's imports from China and the United States. The results show that Indonesia's exports to the United States and Indonesia's exports to China are 2.02, while the average comparison of Indonesian imports from the United States and Indonesia's imports from China is 1.31. the average is more significant when compared to Indonesia's exports and imports with China. Based on the regression results, the exchange rate variable has a significant negative effect on Indonesia's exports and imports with the United States and China. The labor variable has a significant positive impact on Indonesia's exports and imports to the United States and China. In contrast, the population variable significantly affects Indonesia's exports to the United States. It does not substantially affect Indonesian imports from the United States and does not dramatically affect Indonesia's exports and imports with China.

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Trade Restriction and Economic Growth: A Study of Developed and Developing Countries

Archives of Business Research ◽

10.14738/abr.812.9548 ◽

2021 ◽

Vol 8 (12) ◽

pp. 193-202

Author(s):

Mehdi Monadjemi ◽

John Lodewijks

Keyword(s):

United States ◽

Developing Countries ◽

Exchange Rate ◽

Developed Countries ◽

The United States ◽

Statistical Technique ◽

Chinese Government ◽

Trade Barriers ◽

Trade Restrictions ◽

The Exchange Rate

According to the World Bank, most research suggests that unilateral reduction in trade barriers can result in the greatest and the quickest gains in welfare. However, recently United States imposed tariffs on good imported from China and Chinese government retaliated by introducing trade barriers on imports from the United States. Generally, developed counties attempt to improve their trade deficits by allowing the exchange rate to depreciate, whereas developing countries rely more on trade restrictions. In this paper, five developed countries and five developing countries that experienced persistent trade deficits were selected. A VAR statistical technique was used to examine the effects of exchange rate changes of the net trade of two selected groups of countries. It is shown that in case of developed counties, the exchange rate and net trade moved in the same direction. However, the same results were not confirmed for the developing countries.

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Dynamic Interrelationships between the U.S. Agricultural Trade Balance and the Macroeconomy

Journal of Agricultural and Applied Economics ◽

10.1017/s1074070800023208 ◽

2007 ◽

Vol 39 (3) ◽

pp. 457-470 ◽

Cited By ~ 7

Author(s):

Jungho Baek ◽

Won W. Koo

Keyword(s):

United States ◽

Exchange Rate ◽

Money Supply ◽

Trade Balance ◽

The United States ◽

Agricultural Trade ◽

Long Run ◽

Trading Partners ◽

The Exchange Rate ◽

The U.S

The effects of the exchange rate and the income and money supply of the United States and its major trading partners on the U.S. agricultural trade balance are examined using an autoregressive distributed lag (ARDL) model. Results suggest that the exchange rate is the key determinant of the short- and long-run behavior of the trade balance. It is also found that the income and money supply in both the United States and the trading partners have significant impacts on U.S. agricultural trade in both the short and long run.

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Understanding the Sources of Friction in U.S.–China Trade Relations: The Exchange Rate Debate Diverts Attention from Optimum Adjustment

Asian Economic Papers ◽

10.1162/asep.2008.7.3.61 ◽

2008 ◽

Vol 7 (3) ◽

pp. 61-95 ◽

Cited By ~ 29

Author(s):

Wing Thye Woo

Keyword(s):

United States ◽

Exchange Rate ◽

The United States ◽

Moral Imperative ◽

Trade Relations ◽

Trade Imbalances ◽

China Trade ◽

Rmb Appreciation ◽

The Exchange Rate

China has been accused of exchange rate manipulation that has caused large U.S. trade deficits, which have reduced U.S. welfare by increasing unemployment and reducing wages. In fact, the strong claims by some observers that the trade imbalances are deeply deleterious to China's welfare almost make it a moral imperative for the United States to use tariffs to force an renminbi (RMB) appreciation for China's own good.

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A Comparative Analysis of Exchange Rate Pass-Through in China, Eurozone and the U.S.: A Vector Error Correction Model

International Journal of Economics and Finance ◽

10.5539/ijef.v9n8p51 ◽

2017 ◽

Vol 9 (8) ◽

pp. 51

Author(s):

Sheng Xu ◽

Hailun Zhang ◽

Said Atri

Keyword(s):

United States ◽

Exchange Rate ◽

Error Correction ◽

The United States ◽

Error Correction Model ◽

Correction Model ◽

Long Run ◽

The Exchange Rate ◽

Pass Through ◽

The U.S

This study examines the pass-through effect of fluctuations in the exchange rate on inflation in China in comparison with similar effects in the Eurozone and the United States. Using a set of monthly data covering the period 1999 through 2015 for each case, we constructed a Vector Auto Regressive (VAR) model as well as an Error Correction model (VECM) to estimate the pass-through effects in the three cases. In addition, to ensure that our results are statistically unbiased we also tested the stationarity of the variables of the model. Moreover, to distinguish between the short-run and long-run pass-through effects, we made use of a series of co-integration tests. Our results indicate that the pass-through effect of changes in the exchange rate in China is much weaker than it is in the Eurozone and the United States. We found this effect in the U.S. to be both more notable and longer-lasting.

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Pengaruh JUB, Suku Bunga, Inflasi, Ekspor dan Impor terhadap Nilai Tukar Rupiah atas Dollar Amerika Serikat

e-Journal Ekonomi Bisnis dan Akuntansi ◽

10.19184/ejeba.v4i1.4600 ◽

2017 ◽

Vol 4 (1) ◽

pp. 97

Author(s):

Nurul Hazizah ◽

Sebastiana Viphindrartin ◽

Zainuri Zainuri

Keyword(s):

United States ◽

Exchange Rate ◽

Descriptive Analysis ◽

The United States ◽

Least Square ◽

Macroeconomic Conditions ◽

The Exchange Rate ◽

The Difference ◽

Macro Variables ◽

Rate Expectation

Fluctuations of exchange rate against Rupiah to U.S Dollar which unstable are influenced the domestic and foreign’s economicconditions. Macroeconomic conditions in the two countries both Indonesia and United States can make the exchange ratedepreciate or appreciate. The purpose of this research is to acknowledge the difference impact macro variables in both countriesIndonesia and the United States against the value on rupiah to US Dollar. Dynamic model is applied in this research that isPartial Adjustment Model (PAM). This model is considered to existing inertia variable that is expectation of exchange rateinfluence by the value of exchange rate that occurred previously. There are two analysis is descriptive analysis and causalanalysis. Causal is using Ordinary Least Square (OLS) method. OLS estimation of PAM shows all independent variable havepositive impact to the exchange rate expectation besides difference Export variable, in addition the difference of the interest ratevariable can’t influence the exchange rate significantly on important of the exchange rate expectation. In conclusion, theinterest rate policy is considered to influence the rupiah exchange rate if two countries do not change the interest ratesimultaneously and other macro policy variables must bring into line.

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