The Effects of Exchange Rates on Employment in Canada

Haifang Huang, Ke Pang, Yao Tang ()
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Haifang Huang, Ke Pang, Yao Tang: Wilfrid Laurier University, http://www.wlu.ca/homepage.php?grp_id=2626&ct_id=2
Authors registered in the RePEc Author Service: Yao Tang, Haifang Huang () and Ke Pang ()

LCERPA Working Papers from Laurier Centre for Economic Research and Policy Analysis

Abstract: Under the flexible exchange rate regime, the Canadian economy is constantly af- fected by fluctuations in exchange rates. This paper focuses on the employment effect of the exchange rate in Canada. We find that appreciations of the Canadian dol- lar have significant effects on employment in manufacturing industries; such effects are mostly associated with the export-weighted exchange rate and not the import- weighted exchange rate. Meanwhile, the exchange rate has little effect on jobs in nonmanufacturing industries. Because the manufacturing sector accounts for only about 10% of the employment in Canada, the overall employment effect of the ex- change rate is small. In addition, we quantify the loss of manufacturing employment associated with a boom in the commodity market during which the Canadian dollar tends to appreciate. Our estimates suggest that when commodity prices increase by 15.77% (one standard deviation of annual change in commodity price between 1994 and 2010), Canada’s manufacturing employment decreases by 0.8%, about 0.08% of the total employment.

Keywords: exchange rate; employment in Canada (search for similar items in EconPapers)
JEL-codes: F1 F3 J2 (search for similar items in EconPapers)
Pages: 50
Date: 2014-04-29, Revised 2014-04-29
New Economics Papers: this item is included in nep-cba and nep-opm
Note: LCERPA Working Paper No. 2014-8
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Journal Article: Effects of Exchange Rates on Employment in Canada (2014)
Working Paper: The Effects of Exchange Rates on Employment in Canada (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:wlu:lcerpa:0076

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