TY - JOUR
T1 - Regime changes and the impact of currency depreciations
T2 - The case of Spanish-US industry trade
AU - Bahmani-Oskooee, Mohsen
AU - Harvey, Hanafiah
AU - Hegerty, Scott W.
PY - 2013/2
Y1 - 2013/2
N2 - Over the past half century, Western Europe has been part of varying currency regimes. Yet, whether under Bretton Woods, the European Monetary System, or the Euro, exchange-rate fluctuations have had an influence on these countries' trade flows with the United States at the national and the industry level. This study looks at the case of Spain, examining the role of real exchange-rate fluctuations on trade with the United States for 74 industries. We find that the trade balances of only 40 industries are cointegrated with their macroeconomic determinants, but that 26 of these respond positively in the long run to a real depreciation. While industry characteristics do not seem to explain which industries are more likely to do this, we find that a relatively large share of industries in the Machinery sector see their trade balances improve after a depreciation.
AB - Over the past half century, Western Europe has been part of varying currency regimes. Yet, whether under Bretton Woods, the European Monetary System, or the Euro, exchange-rate fluctuations have had an influence on these countries' trade flows with the United States at the national and the industry level. This study looks at the case of Spain, examining the role of real exchange-rate fluctuations on trade with the United States for 74 industries. We find that the trade balances of only 40 industries are cointegrated with their macroeconomic determinants, but that 26 of these respond positively in the long run to a real depreciation. While industry characteristics do not seem to explain which industries are more likely to do this, we find that a relatively large share of industries in the Machinery sector see their trade balances improve after a depreciation.
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U2 - 10.1007/s10663-011-9176-1
DO - 10.1007/s10663-011-9176-1
M3 - Article
AN - SCOPUS:84872657800
VL - 40
SP - 21
EP - 37
JO - Empirica
JF - Empirica
SN - 0340-8744
IS - 1
ER -