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Testing the relationship between real effective exchange rate and absolute cost advantage. A dynamic panel GMM analysis from NAFTA

Fahd Boundi Chraki

Applied Economics Letters, 2021, vol. 28, issue 15, 1332-1335

Abstract: This research aims to test the nexus between real effective exchange rates and absolute cost advantage for the North American Free Trade Agreement (NAFTA) between 1995 and 2014. By using the dynamic panel generalized method of moments (GMM), the findings show that the manufacturing sectors’ competitiveness is positively associated with the decrease in unit production costs and negatively related to the increase in the intrasectoral profitability gap.

Date: 2021
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DOI: 10.1080/13504851.2020.1814941

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