The real exchange rate and US manufacturing profits: a theoretical framework with some empirical support
Year: 1997
Type: article
Abstract: This paper studies the relationship between the real exchange rate and manufacturing profits using Marston's model of pricing-to-market. Looking at US data, we find that a sustained real depreciation of the dollar has a significant and substantial influence on manufacturing profits. During the early 1980s, the appreciation of the dollar reduced profits by at least 25% conditional on the realized time path of sales, costs, and the US markup. The post-plaza depreciation of the dollar boosted profits at least 30%. © 1997 John Wiley & Sons, Ltd.
Author: Richard H. Clarida
Language: English
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W1595878808