| The effects of foreign exchange rate of the dollar on exports of U.S. corn, cotton, soybeans, and poultry are evaluated. Using annual export and exchange rate data from 1961 to 2000, the effects of exchange rate levels and volatility on the volume of exports of the four commodities are analyzed. The effects of exchange rates and exchange rate volatility on measures of competitiveness are also examined using the Threshold Autoregressive Conditional Heteroskedasticity (TARCH) model.; Previous studies have shown positive, negative, or no effects of exchange rate levels and volatility on trade flows. This study uses four commodities and different measures of competitiveness, and tests for the effects of exchange rate levels and volatility on those exports. Exchange rates of the exporting country and the exchange rates of selected competitors in the export market are included in the model. The results trace measurement errors that are likely to appear as a consequence of using different measurements of competitiveness and exchange rates.; The relative sensitivity of each export commodity on the exchange rate is distinguished. All measures indicate that poultry exports from the United States are the most sensitive to changes in the exchange rates. Cotton exports show the least sensitivity to exchange rate. Competitiveness measures of all four commodities, in most cases, are negatively related to the relative level and volatility of exchange rates.; The competitors' exchange rates and comparative advantage indices are used as indicators for their reactions to competitiveness changes. Reaction variable, measured in the revealed comparative advantage, suggest that exports are inversely related to the exports of the other competitors. The results also indicate the positive relationship between export competitiveness and exchange rate of the competitors. |
