Exports and the Exchange Rate: A General Equilibrium Perspective
Bibliographic record
Abstract
How do a country’s exports change when its currency depreciates? The typical view is that currency depreciation leads to higher exports because it lowers export prices and entices foreign buyers to switch spending toward these goods. But why the exchange rate depreciates in the first place might also matter. In this article, we shed light on this aspect of the issue. We ask whether the relationship between exchange rate movements and exports differs depending on the fundamental driver of the exchange rate. Using data for Canada, we identify cases where the Canada-US exchange rate changes because of factors such as Canadian monetary policy, global oil prices and US income growth. From there, we account for how exports evolve in each of these cases. We find that exports evolve very differently from one shock to another. This, we argue, reflects that the direct impact of the exchange rate on export prices and export purchases is weak. Instead, the main driver of exports for Canada is not the exchange rate but rather US growth, which sometimes comoves with the exchange rate. Our findings suggest that the exchange rate’s role as an automatic stabilizer and in transmitting monetary policy for Canada is not as strong as is traditionally assumed.
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How this classification was reachedexpand
Full frame machine prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. The Gemma side is a direct model label for every work in the frame, read from the title-only record. The Codex side is a classifier learned from the 10,348 direct Codex labels and calibrated to design-weighted sample rates; fields without enough sample support carry no Codex call. Candidate is the union of the two sides; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels.
Distilled classifier scores by category (both heads)
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.001 | 0.002 |
| Meta-epidemiology (narrow) | 0.001 | 0.000 |
| Meta-epidemiology (broad) | 0.001 | 0.001 |
| Bibliometrics | 0.001 | 0.001 |
| Science and technology studies | 0.001 | 0.001 |
| Scholarly communication | 0.004 | 0.003 |
| Open science | 0.001 | 0.001 |
| Research integrity | 0.002 | 0.001 |
| Insufficient payload (model declined to judge) | 0.009 | 0.001 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; a candidate call from one source (direct Gemma or distilled Codex), not a consensus.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".