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

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.

  • 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.
  • Keywords: Exchange rate pass-through Oriented strand board Smooth transition model Unemployment rate
  • Posted Date: December 17, 2019
  • Modified Date: December 23, 2019
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