TY  - JOUR
AU  - Campa,Jose
AU  - Goldberg,Linda S.
TI  - Investment, Pass-Through and Exchange Rates: A Cross-Country Comparison
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 5139
PY  - 1995
Y2  - June 1995
UR  - http://www.nber.org/papers/w5139
L1  - http://www.nber.org/papers/w5139.pdf
N1  - Author contact info:
Jose M. Campa
IESE Business School
Camino del Cerro del Aguila, 3
28023 Madrid
SPAIN
Tel: 34-91-357-0809
Fax: 34-91-357-2913
E-Mail: jcampa@iese.edu

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  - Although large changes in real exchange rates have occurred during the past decades, the real implications of these movements remain an empirical question.  Using detailed data from the United States, Canada, the United Kingdom, and Japan we examine the implications of exchange rates for time series of sectoral investment. Both theoretically and empirically we show that investment responsiveness to exchange rates varies over time, positively in relation to sectoral reliance on export share and negatively with respect to imported inputs into production.  The quantitative importance of each of these channels of exposure is a function of a set of exchange rate pass-through and demand elasticities.  There exist important differences in investment endogeneity across high and low markup sectors, with investment in low markup sectors significantly more responsive to exchange rates.  Unlike pass-through elasticities, which are viewed as industry-specific, investment endogeneity to exchange rates is a country-specific phenomenon.
ER  -