Terms of trade and real exchange rates: the Canadian evidence

Article Abstract:

The relationship between terms of trade and the exchange rate is discussed using US and Canadian data. Through the use of cointegration tests and a trade model, it is shown that there exists a definite link between the two variables in the case of the two countries. The status and variation in the terms of trade has been more significant than monetary policy in determining the exchange rate. However, further research is needed to find out whether this conclusion applies to the case of other countries.

Economic aspects, Terms of trade

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Exchange rate exposure and industry characteristics: evidence from Canada, Japan and the USA

Article Abstract:

An analysis of exchange rate exposures and industry characteristics ispresented. The analysis focuses on data covering the US, Canada and Japan and evaluates rate variations to a domestic market model of industry portfolio returns. It is shown that some industries feature significant exposures in the three countries. In addition, the exchange rate exhibits the ability to describe economy-wide industry returns for each country.

United States, Japan, International trade

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Exchange risk, exposure, and the option to trade

Article Abstract:

Exchange rate uncertainty may generate trade because of the increased probability that ex post deviations from commodity price parity will exceed tariffs and transportation costs. This effect is demonstrated using a small-country, short-term model under conditions of perfect competition and of a monopolist trader-producer. Results show that exchange rate volatility has unclear effects under partial monopoly situations.

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