Job Creation, Job Destruction, and the Real Exchange Rate

Michael Klein, Scott Schuh and Robert Triest

No 7466, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper contributes to an understanding of internationally generated adjustment costs by demonstrating a statistically significant and economically relevant effect of the real exchange rate on job creation and job destruction in U.S. manufacturing industries over the period 1973 to 1993. The responsiveness of these gross job flows to the real exchange rate reflects pervasive heterogeneity with respect to international conditions across firms, even within narrowly defined industries. We document this heterogeneity and show that the responsiveness of job flows to movements in the real exchange rate varies with the industry's openness to international trade. We also show an asymmetry in the responsiveness of job flows to the real exchange rate; appreciations play a significant role in job destruction, but job flows do not respond significantly to dollar depreciations.

JEL-codes: F4 (search for similar items in EconPapers)
Date: 2000-01
New Economics Papers: this item is included in nep-ifn and nep-lab
Note: IFM
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Citations: View citations in EconPapers (7)

Published as "The Real Exchange Rate and Foreign Direct Investment in the United States: Relative Wealth Vs. Relative Wage Effects", Journal of International Economics (1994).

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Journal Article: Job creation, job destruction, and the real exchange rate (2003)
Working Paper: Job creation, job destruction, and the real exchange rate (1999)
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