Real Exchange Rate Fluctuations and the Dynamics of Retail Trade Industries on the U.S.-Canada Border

FRB Chicago Working Paper No. 2002-17

FRB Chicago Working Paper No. 2002-17

51 Pages Posted: 3 Apr 2003

See all articles by Jeffrey R. Campbell

Jeffrey R. Campbell

University of Notre Dame; Tilburg University

Beverly J. Lapham

Queen's University

Multiple version iconThere are 2 versions of this paper

Date Written: July 30, 2002

Abstract

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' retailers. Using annual county-level data, we estimate the effects of real exchange rates on the number of establishments and their average employment 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, so 'long-run' changes in net entry in fact occur quickly enough to matter for short-run fluctuations.

JEL Classification: F4, E3, L8

Suggested Citation

Campbell, Jeffrey R. and Lapham, Beverly J., Real Exchange Rate Fluctuations and the Dynamics of Retail Trade Industries on the U.S.-Canada Border (July 30, 2002). FRB Chicago Working Paper No. 2002-17, FRB Chicago Working Paper No. 2002-17, Available at SSRN: https://ssrn.com/abstract=365080 or http://dx.doi.org/10.2139/ssrn.365080

Jeffrey R. Campbell

University of Notre Dame ( email )

United States

Tilburg University ( email )

Tilburg, 5000 LE
Netherlands

Beverly J. Lapham (Contact Author)

Queen's University ( email )

Kingston, Ontario K7L 3N6 K7L 3N6
Canada

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