EconPapers    
Economics at your fingertips  
 

Bilateral Exchange Rates and Jobs

Eddy Bekkers () and Joseph Francois

Papers from World Trade Institute

Abstract: Abstract We study the labor market effects of realignment in fixed bilateral exchange rates, such as China's peg to the US dollar. We employ the open economy model by de Melo and Robinson to identify the core parameters of the real, trade side of the economy driving the unemployment effects of bilateral exchange rate realignment. A small open economy version of the model is explored analytically and a large multicountry version numerically. Analytics in the small open economy model show that unemployment effects of adjusting of a bilateral peg hinge on the fraction exported to and imported from the trading partner. A larger fraction exported to and a smaller fraction imported from the trading partner make it more likely that revaluation of a trading partner's currency has beneficial effects. Numerics in the large economy model show that Chinese revaluation can generate both positive and negative unemployment effects depending upon underlying parameter values. Adverse unemployment effects can go along with an improving trade balance.

Date: 2013-12-13
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
http://www.wti.org/media/filer_public/71/d7/71d798 ... nal_economics_1_.pdf First version (application/pdf)

Related works:
Journal Article: Bilateral Exchange Rates and Jobs (2014) Downloads
Working Paper: Bilateral Exchange Rates and Jobs (2012) Downloads
Working Paper: Bilateral Exchange Rates and Jobs (2012) Downloads
Working Paper: Bilateral Exchange Rates and Jobs (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wti:papers:890

Access Statistics for this paper

More papers in Papers from World Trade Institute Contact information at EDIRC.
Bibliographic data for series maintained by Morven McLean ().

 
Page updated 2020-11-23
Handle: RePEc:wti:papers:890