The failure of the dollar's depreciation to narrow the U.S. trade deficit has driven recent research showing that the transmission of exchange rate changes to import prices has declined sharply in industrial countries. Estimates presented in this study, however, suggest that "pass-through" to...

The continuing strength of the dollar has fueled interest in the relationship between productivity and exchange rates. An analysis of the link between the dollar's movements and productivity developments in the United States, Japan, and the euro area suggests that productivity can account for...

That central banks should hold foreign currency reserves is a key tenet of the post-Bretton Woods international financial order. But recent growth in the reserve balances of industrialized countries raises questions about what level and composition of reserves are “right” for these...

Some market observers attribute the dollar's recent drop against the mark and yen to a type of currency option known as the knockout option. Although knockouts did contribute modestly to the dollar's fall, their full impact was felt to a much greater extent in the option markets.

Despite an appreciating yen, Japanese firms have managed to maintain strong export sales growth during the first half of the 1990s. Their strategies? Cutting the yen price of exports and shifting production to higher-value merchandise.

U.S. manufacturing industries are becoming increasingly sensitive to changes in the international value of the dollar. A look at recent studies of exchange rate effects on industry performance suggests that the 1997-98 rise in the dollar may significantly reduce U.S. producers' profits and...

Sharp swings in a developing country's terms of trade, the price of its exports relative to the price of its imports, can seriously disrupt output growth. An analysis of the effects of a decline in export prices in seventy-five developing economies suggests that countries with a flexible...