Nonlinear exchange rate pass-through in timber products: the case of oriented strand board in Canada and the United States

Barry Goodwin (), Matthew Holt and Jeffrey P. Prestemon

MPRA Paper from University Library of Munich, Germany

Abstract: We assess exchange rate pass–through (ERPT) for U.S. and Canadian prices for oriented strand board (OSB), a wood panel product used extensively in U.S. residential construction. Because of its prominence in construction and international trade, OSB markets are likely sensitive to general economic conditions. In keeping with recent research (e.g., Al-Abri and Goodwin, 2009; Larue et al., 2010), we examine regime–specific ERPT effects; we use a smooth transition vector error correction model. We also build on work by Nogueira, Jr. and Leon-Ledesma (2011) and Chew et al. (2011) in considering ERPT asymmetries associated with a measure of general macroeconomic activity. Our results indicate that during expansionary periods ERPT is modest, at least initially, but during the recent financial crises ERPT effects were quite large.

Keywords: Exchange rate pass–through; oriented strand board; smooth transition model; unemployment (search for similar items in EconPapers)
JEL-codes: E32 F10 F30 (search for similar items in EconPapers)
Date: 2012-08-22
New Economics Papers: this item is included in nep-mac and nep-opm
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Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Nonlinear exchange rate pass-through in timber products: The case of oriented strand board in Canada and the United States (2019)
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