ABSTRACT
The time period to be analyzed is January of 1979 through December of 1988 (data were available for 1978 but the use of 12 monthly lags of the exchange rate variable effectively makes January 1979 the initial observation). Some reasons for choosing this period are: (1) exchange rates of most major U.S. trading partners were floating, (2) the dollar experienced three distinct cycles against most major currencies, and (3) many important traded products, such as certain types of electronics, were not produced in earlier time periods.
