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Has global competition changed US export pricing?
Author(s) -
Ceglowski Janet
Publication year - 2012
Publication title -
international journal of finance and economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.505
H-Index - 39
eISSN - 1099-1158
pISSN - 1076-9307
DOI - 10.1002/ijfe.438
Subject(s) - economics , exchange rate , exchange rate pass through , competition (biology) , monetary economics , currency , capital (architecture) , capital good , international economics , local currency , economy , goods and services , history , ecology , archaeology , biology
This paper investigates the behaviour of aggregate US export prices over the period from the early 1980s through 2007. It finds significant parameter instability in a number of the export price equations, much of it consistent with a growing role of international factors in US export pricing. In the capital goods sector, the instability is traced to increases in the exchange rate responsiveness of export prices. The increase in the export price response of capital goods to the exchange rate is not unique to the US and may reflect intensified competition in the global market for machinery and transportation equipment. Even with these changes the exchange rate response of US export prices remains low, suggesting US exporters continue to pass through the bulk of exchange rate changes to the foreign‐currency prices of their goods. Copyright © 2011 John Wiley & Sons, Ltd.