Open AccessReal Exchange Rates And U.S. Bilateral Trade
Author(s) -
Abdulhamid Sukar,
Taisier AlDaib Zoubi
Publication year - 2011
Publication title -
journal of applied business research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.149
H-Index - 22
eISSN - 2157-8834
pISSN - 0892-7626
DOI - 10.19030/jabr.v12i4.5790
Subject(s) - depreciation (economics) , economics , liberian dollar , exchange rate , linkage (software) , balance of trade , monetary economics , bilateral trade , international economics , persistence (discontinuity) , finance , geography , microeconomics , capital formation , archaeology , china , financial capital , gene , profit (economics) , geotechnical engineering , engineering , biochemistry , chemistry
The persistence of the U.S. trade deficit despite the significant depreciation of the dollar in the second half of the 1980s prompted several studies seeking an explanation for this phenomenon. There has been a renewed interest on the exchange rate trade linkage as the U.S. trade deficit reached a record high despite steady depreciation of the dollar in early 1995. This paper presents an empirical analysis of the relationship between real exchange rate and U.S. exports to Canada and Japan. The major finding of this paper is that real income and real exchange rates changes are important determinants of bilateral trade flows.