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Exchange-rate volatility and industry trade between the U.S. and Korea

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  • Exchange-rate volatility and industry trade between the U.S. and Korea
  • Bahmani-Oksooee, Mohsen; Harvey, Hanafiah; Hegerty, Scott W.
  • Chung-Ang University(Economic Research Institute)


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Title Exchange-rate volatility and industry trade between the U.S. and Korea
Similar Titles
Material Type Articles
Author(English)

Bahmani-Oksooee, Mohsen; Harvey, Hanafiah; Hegerty, Scott W.

Publisher

[Seoul]:Chung-Ang University(Economic Research Institute)

Date 2012-03
Journal Title; Vol./Issue Journal of Economic Development:vol. 37(no. 1)
Subject Country United States(Americas)
South Korea(Asia and Pacific)
Language English
File Type Link
Subject Economy < Trade
Economy < Economic Conditions
Holding Chung-Ang University

Abstract

Even though numerous empirical studies have investigated the effects of the post-Bretton Woods increase in exchange-rate volatility, they have not reached a consensus whether this uncertainty universally reduces trade flows. As a result, recent studies have employed industry-level data to further isolate the causes of these ambiguous results. In this study, we investigate U.S. trade with South Korea, both at the bilateral level and for 96 U.S. export and 29 U.S. import industries. We find that exchange rate volatility has significant short-run effects on most industries’ exports and imports. In the long run, however, only 16 exporting industries and seven importing industries are affected by volatility (some positively and some negatively). Most affected industries are small, as measured by their trade share.