Time: 10:30-12:00 am on Mar. 29, 2017 (Wednesday)
Location: WanZhong Building (2nd floor), National School of Development
Host: Miaojie Yu
Speaker: Michael Devereux (University of British Columbia)
Title: The Canadian Border and the US Dollar: The Impact of Exchange Rate Changes on Cross-Border Retailers
Abstract: This paper provides a micro-level investigation into the impact of changes in the US-Canada real exchange rate on retail trade in US regions lying close to the US-Canadian border. Using a large data set on retail prices and sales in the United States over a nine year period, we explore the links between changes in exchange rates, cross-border travel, and the price and quantity responses of US retailers. This allows us to assess the importance of geography and distance in measuring the pass-through of exchange rate changes into prices and quantities at the level of the consumer. We develop a two stage theoretical model of cross-border travel and industry equilibrium for retail sales at the border. Our empirical results accord well with the implications of the model.
Michael Devereux is currently the professor in the Vancouver School of Economics, University of British Columbia. He obtained his PhD from Queen’s University and his main area of interest is in international macroeconomics and international finance. Currently, his research activity is in the area of exchange rate determination, the link between exchange rates and prices, and international aspects of monetary and fiscal policy. Professor Devereux has published a great many papers on top journals like American Economic Review, Review of Economic Studies, Quarterly Journal of Economics, Journal of International Economics, Journal of Monetary Economics, International Economic Review, American Economic Journal: Macroeconomics, and et al. And he has been the associate editor for International Journal of Central Banking since 2013.