Real options effects on employment: Does exchange rate uncertainty matter for aggregation?

German Economic Review

Volumn 6, Issue 2, 2005, Pages 185-203

  Belke, Ansgar ^a,b   Göcke, Matthias ^c  

^a UNIVERSITY OF HOHENHEIM   (Germany)

^b IZA   (Germany)

^c UNIVERSITY OF MÜNSTER   (Germany)

Author keywords

Aggregation; Employment hysteresis; Exchange rate uncertainty; Real options

Indexed keywords

EMPLOYMENT; EXCHANGE RATE; UNCERTAINTY ANALYSIS;

EID: 19844379828     PISSN: 14656485     EISSN: None     Source Type: Journal    
DOI: 10.1111/j.1465-6485.2005.00126.x     Document Type: Article

References (31)

1. Amable, B., J. Henry, F. Lordon and R. Topol (1991), 'Strong Hysteresis: An Application to Foreign Trade', OFCE Working Paper/Document de travail no. 9103, Observatoire Français des Conjonctures Economiques, Paris.
2. Amable, B., J. Henry, F. Lordon and R. Topol (1994), 'Strong Hysteresis versus Zero-Root Dynamics', Economic Letters 44, 43-47.
3. Amable, B., J. Henry, F. Lordon and R. Topol (1995), 'Weak and Strong Hysteresis: An Application to Foreign Trade', Economic Notes 24, 353-374.
4. Baldwin, R. and P. Krugman (1989), 'Persistent Trade Effects of Large Exchange Rate Shocks', Quarterly Journal of Economics 104, 635-654.
5. Belke, A. and M. Göcke (1999), 'A Simple Model of Hysteresis in Employment under Exchange Rate Uncertainty', Scottish Journal of Political Economy 46, 260-286.
6. Belke, A. and M. Göcke (2001a), 'Exchange Rate Uncertainty and Employment: An Algorithm Describing "Play"', Applied Stochastic Models in Business and Industry 17(2), 181-204.
7. Belke, A. and M. Göcke (2001b), 'Exchange Rate Uncertainty and "Play"-Nonlinearity in Aggregate Employment', International Advances in Economic Research 7, 38-50.
8. Belke, A. and D. Gros (2001), 'Evidence on the Costs of Intra-European Exchange Rate Variability', Open Economies Review 12, 231-264.
9. Bentolila, S. and G. Bertola (1990), 'Firing Costs and Labour Demand: How Bad is Eurosclerosis?', Review of Economic Studies 57, 381-402.
10. Brokate, M. and J. Sprekels (1996), 'Hysteresis and Phase Transitions', in: J. E. Marsden, L. Sirovich and F. John (eds.), Applied Mathematical Sciences, Springer, New York, p. 121.
11. Caballero, R. J. (1991), 'On the Sign of the Investment-Uncertainty Relationship', American Economic Review 81, 279-288.
12. Caballero, R. J., E. M. R. A. Engel and J. Haltiwanger (1997), 'Aggregate Employment Dynamics: Building from Macro Evidence', American Economic Review 87, 115-137.
13. Côté, A. (1994), 'Exchange Rate Volatility and Trade - A Survey', Bank of Canada, Working Paper No. 94-5, Ottawa.
14. Cross, R. (1994), 'The Macroeconomic Consequences of Discontinuous Adjustment: Selective Memory of Non-Dominated Extrema', Scottish Journal of Political Economy 41, 212-221.
15. Cushman, D. (1985), 'Real Exchange Rate Risk, Expectations, and the Level of Direct Investment', Review of Economics and Statistics 67, 297-308.
16. Darby, J., A. Hughes Hallet, J. Ireland and L. Piscitelli (1998), 'The Impact of Exchange Rate Uncertainty on the Level of Investment', CEPR Discussion Paper No. 1896.
17. De Grauwe, P. and F. Skudelny (1997), 'The Impact of EMU on Trade Flows', Department of Economics Discussion Paper No. 133, Katholieke Universiteit, Leuven.
18. Dixit, A. (1989), 'Entry and Exit Decisions under Uncertainty', Journal of Political Economy 97, 620-638.
19. Dixit, A. and R. S. Pindyck (1994), Investment under Uncertainty, Princeton University Press, Princeton, NJ.
20. Dornbusch, R. (1987), 'Open Economy Macroeconomics: New Directions', NBER Working Paper No. 2372.
21. Göcke, M. (1994), 'Micro- and Macro-Hysteresis in Foreign Trade', Aussenwirtschaft-Schweizerische Zeitschrift für internationale Wirtschaftsbeziehungen 49, 555-578.
22. Göcke, M. (2002), 'Various Concepts of Hysteresis Applied in Economics', Journal of Economic Surveys 16(2), 167-188.
23. Krasnosel'skii, M. A. and A. V. Pokrovskii (1989), Systems with Hysteresis, Springer, Berlin.
24. Krugman, P. (1989), Exchange Rate Instability, MIT Press, Cambridge, MA.
25. Mayergoyz, I. D. (1986), 'Mathematical Models of Hysteresis', IEEE Transactions on Magnetics 22, 603-608.
26. Parsley, D. C. and S.-J. Wei (1993), 'Insignificant and Inconsequential Hysteresis: The Case of US Bilateral Trade', Review of Economics and Statistics 75, 606-613.
27. Pindyck, R. S. (1988), 'Irreversible Investment, Capacity Choice and Uncertainty', American Economic Review 78, 969-985.
28. Pindyck, R. S. (1991), 'Irreversibility, Uncertainty, and Investment', Journal of Economic Literature 29, 1110-1148.
29. Piscitelli, L., R. Cross, M. Grinfeld and H. Lambda (2000), 'A Test for Strong Hysteresis', Computational Economics 15, 59-78.
30. Saint-Paul, G. (1996), Dual Labor Markets: A Macroeconomic Perspective, MIT Press, Cambridge, MA.
31. van Garderen, K. J., K. Lee and M. H. Pesaran (1997), 'Cross-Sectional Aggregation of Non-Linear Models', DAE Working Paper No. 9803, Department of Applied Economics, University of Cambridge.