Exchange Rate Sensitivity of U.S. Trade Flows: Evidence from Industry Data

Previous research that investigated the relation between U.S. trade flows and the value of the dollar either employed trade data between the United States and the rest of the world or between the United States and her major trading partners. In this paper we use monthly import and export data from 66 industries in the United States SITC Commodity Groupings over the January 1991–August 2002 period as well as cointegration analysis and show that in the long run real depreciation of the dollar stimulates export earnings of many U.S. industries, whereas it has no significant impact on most importing industries.