TY  - JOUR
AU  - Goldberg,Linda S.
TI  - Nominal Exchange Rate Patterns:  Correlationswith Entry, Exit, and Invesment in U.S. Industry
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3249
PY  - 1990
Y2  - January 1990
UR  - http://www.nber.org/papers/w3249
L1  - http://www.nber.org/papers/w3249.pdf
N1  - Author contact info:
Linda S. Goldberg
Research Department, 3rd Floor
Federal Reserve Bank-New York
33 Liberty Street
New York, NY 10045
Tel: 212/720-2836
Fax: 212/720-6831
E-Mail: linda.goldberg@ny.frb.org
AB  - The view that the strength of the dollar in the early 1980s was associated with persistent restructuring of United States industry is supported by correlations between exchange rate patterns and data on business formation, business failure and sectoral investment in new plant and equipment. Short term trend depreciations of the dollar are associated with reallocation of resources across sectors, while longer term trend depreciations are associated with investment expansions in many sectors of industry. Persistent exchange rate volatility is strongly associated with investment contractions, with this effect weakest during depreciation periods. This suggests a second order effect of depreciation trends: during trend depreciation periods the negative and significant correlation between exchange rate volatility and investment is reduced.
ER  -