TY  - JOUR
AU  - Campbell,Jeffrey R.
AU  - Lapham,Beverly
TI  - Real Exchange Rate Fluctuations and the Dynamics of Retail Trade Industries on the U.S.-Canada Border
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8558
PY  - 2001
Y2  - October 2001
UR  - http://www.nber.org/papers/w8558
L1  - http://www.nber.org/papers/w8558.pdf
N1  - Author contact info:
Jeffrey R. Campbell
Senior Economist
Economic Research Department
Federal Reserve Bank of Chicago
230 South LaSalle Street
Chicago, IL 60604-1413
Tel: 312/322-6156
Fax: 312/322-2357
E-Mail: jcampbell@frbchi.org
AB  - Consumers living near the U.S.-Canada border can shift their expenditures between the two countries, so real exchange rate fluctuations can act as demand shocks to border areas' retail trade industries. Using annual county-level data, we estimate the effects of real exchange rates on the number of establishments and their average payroll in border counties for four retail industries. In three of the four industries we consider, the number of operating establishments responds either contemporaneously or with a lag of one year to real exchange rate movements. For these industries, the response of retailers' average size is less pronounced. The rapid response of net entry is inconsistent with any model of persistent deviations from purchasing power parity that depends on retailers' costs of changing nominal prices.
ER  -