Nonlinear exchange rate pass-through in timber products: The case of oriented strand board in Canada and the United States

Barry K. Goodwin; Matthew T. Holt; Jeffrey P. Prestemon

doi:10.1016/j.najef.2019.100989

Treesearch

Nonlinear exchange rate pass-through in timber products: The case of oriented strand board in Canada and the United States

Formally Refereed

Authors:

Barry K. Goodwin, Matthew T. Holt, Jeffrey P. Prestemon

Year:

2019

Type:

Scientific Journal

Station:

Southern Research Station

DOI:

https://doi.org/10.1016/j.najef.2019.100989

Source:

The North American Journal of Economics and Finance

Download (PDF 2.29 MB)

Download (PDF 2.29 MB): https://research.fs.usda.gov/download/treesearch/59233.pdf

Abstract

We assess exchange rate pass-through (ERPT) for U.S. and Canadian prices for oriented strand board (OSB), a structural wood panel product used extensively in U.S. residential construction. Because of its prominence in construction and international trade, OSB markets are likely sen- sitive to general economic conditions. In keeping with recent research, we examine regime- specific ERPT effects; we use a smooth transition vector error correction model. We also consider ERPT asymmetries associated with a measure of general macroeconomic activity. Our results indicate that during expansionary periods ERPT is modest, but during downturns, ERPT effects are larger.

Keywords

Exchange rate pass-through, Oriented strand board, Smooth transition model, Unemployment rate

Citation

Goodwin, Barry K.; Holt, Matthew T.; Prestemon, Jeffrey P. 2019. Nonlinear exchange rate pass-through in timber products: The case of oriented strand board in Canada and the United States. The North American Journal of Economics and Finance. 50: 100989-. https://doi.org/10.1016/j.najef.2019.100989.