Real exchange rate effects on technology-intensive exports: A three-country multiproduct study

Abstract

Kofl Afriyie and Sumit Kundu7% study explores the possible effects of changes in real exchange rates on exports of six high-technology products from Germany, Japan, and the United States over a 24yearperiod. Findings in tbis article indicate significant county and product dzyferences in exchange rate effects on exports of high-technology products. These observations suggest that using aggregate balance-oftrade data to determine the influence of exchange rates on a nation's export perforrnunce can mislead policymukers about the nature of foreign trade and national competitiveness in an increasingly globalized industrial economy.

Do Exchange Rates and Foreign Incomes Matter for Exports at the State Level?

“…1 The literature has employed many methodological approaches; although the estimated magnitudes differ across studies, the common result is that both variables affect export volumes at significant levels in the direction implied by the standard theory. Some of the prominent articles include: Krugman and Baldwin (1987); Hooper and Marquez (1993); Adams, Gangnes, and Shishido (1993); Afriyie and Kundu (1994); Wilson (1993); Lenz (1992); Broll and Wahl (1996); Sachs and Shatz (1994); Kim (1991), Hooper and Mann (1989), Bryant, Holtham, and Hooper (1988), Cline (1989), and Dornbush and Werner (1994).…”