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Journal Article
Comparing manufacturing export growth across states: what accounts for the differences?
The expansion of United States manufacturing exports has spread unevenly across states. Cletus C. Coughlin and Patricia S. Pollard use shift-share analysis to account for the difference between a state?s manufacturing export growth and national manufacturing export growth between 1988 and 1998. Three effects are examined. The industry mix effect indicates that a state should have experienced export growth above the national average if its exports were relatively more concentrated in industries whose exports expanded faster than the national average. The destination effect indicates that a ...
Journal Article
Import prices and the exchange rate
Journal Article
Going down: the Asian crisis and U.S. exports
The Asian financial and economic crisis has attracted much attention to the trade links among the United States and countries throughout Asia. Until the crisis, U.S. exports to East Asia were growing rapidly. In this article, Patricia S. Pollard and Cletus C. Coughlin examine the abrupt decline in exports and provide estimates of the sizes of the export shock both to the U.S. economy as a whole and to specific sectors. More than half the industries they studied experienced declines in exports to East Asia of more than 15 percent; however, focusing solely on the export data overstates the ...
Journal Article
Trade between the United States and Eastern Europe
Journal Article
The crisis that wasn't: Asia and the Eighth District
The East Asian financial crisis sent economies world wide reeling. So how did the Eighth District remain relatively unscathed?
Working Paper
A simple model of international capital flows, exchange rate risk, and portfolio choice
This paper examines international capital flows in the context of a simple Diamond-Dybvig model in which there are neither moral hazard nor adverse selection problems, thus isolating exchange rate risk as the propagator of capital flows. The model shows that adverse changes in exchange rate expectations can result in "hot money" flows even when a bank's balance sheet is perfectly transparent and its assets have a positive net present value in local currency terms. The model also indicates that foreign deposit guarantees even in the absence of a change in the bank's portfolio can increase ...
Working Paper
The effects of aging and myopia on the pay-as-you-go social security systems of the G7
The Social Security systems of the G7 countries were established in an era when populations were young and the number of contributors far outweighed the number of beneficiaries. Now, for each beneficiary there are fewer contributors, and this downward trend is projected to accelerate. To evaluate the prospects for these economies we develop an overlapping generations model in which growth is endogenously fueled by individuals' investments in physical and human capital and by the government's investment in human capital via public education expenditures. We analyze individuals' behavior when ...
Working Paper
Macroeconomic policy effects in a monetary union
This paper develops a two-country model of a monetary union. In order to analyze fully the linkages between the countries, the model specifies structural equations for the goods, money and bond markets in each country. Interdependencies arise through trade, the asset markets, and a common currency. The model also includes a supply side for each economy based on an expectations augmented Phillips curve. Using this model it is possible to trace the shifts in aggregate demand and aggregate supply in both countries resulting from a change in fiscal and monetary policies. The results suggest that ...
Journal Article
U.S. production abroad
Working Paper
To chain or not to chain trade-weighted exchange rate indexes
With the advent of chain calculations for the U.S. national income and product accounts, it seems reasonable to contemplate using the chain approach for other indexes, such as trade-weighted exchange rates (TWEXs). A fundamental criticism of measuring the growth of gross domestic product by a fixed-base-year method is that the estimates are highly sensitive, especially when the economy?s structure is changing dramatically, to the arbitrary choice of the base year. Such a criticism can be levied against TWEXs. In fact, even TWEXs constructed using a Paasche index rather than a Laspeyres index ...