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Exchange rate fluctuations and labour market adjustments in Canadian manufacturing industries

Gabriel Bruneau () and Kevin Moran ()

Canadian Journal of Economics/Revue canadienne d'économique, 2017, vol. 50, issue 1, 72-93

Abstract: We estimate the link between exchange rate fluctuations and the labour input of Canadian manufacturing industries. The analysis is based on a dynamic model of labour demand and the econometric strategy employs a panel two‐step approach for cointegrating regressions. Our data are drawn from a panel of 20 manufacturing industries from the KLEMS database and cover a long sample period that includes all cycles of appreciation and depreciation of the Canadian dollar over the last 50 years. Our results indicate that exchange rate fluctuations have significant long‐term effects on the labour input of Canada's manufacturing industries, especially for trade‐oriented industries, but that these long‐term impacts materialize very gradually following shocks. Fluctuations du taux de change et ajustements du marché du travail dans des industries manufacturières canadiennes. Nous estimons le lien entre les fluctuations du taux de change et l’intrant travail dans les industries manufacturières canadiennes. L’analyse est fondée sur un modèle dynamique de demande de travail, et la stratégie économétrique utilise une approche en deux étapes pour données de panel pour des relations de co‐intégration. Les données utilisées sont tirées d’un panel de 20 industries manufacturières de la base de données KLEMS et couvrent une longue période d’échantillonnage incluant tous les cycles d’appréciation et de dépréciation du dollar canadien au cours des derniers 50 ans. Les résultats montrent que les fluctuations du taux de change ont des effets à long terme significatifs sur l’intrant travail des industries manufacturières canadiennes, en particulier pour les industries orientées vers le commerce extérieur, mais que ces effets à long terme se matérialisent très graduellement à la suite des chocs.

Date: 2017
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https://doi.org/10.1111/caje.12251

Related works:
Journal Article: Exchange rate fluctuations and labour market adjustments in Canadian manufacturing industries (2017) Downloads
Working Paper: Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries (2015) Downloads
Working Paper: Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries (2012) Downloads
Working Paper: Exchange Rate Fluctuations and Labour Market Adjustments in Canadian Manufacturing Industries (2012) Downloads
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