The Appreciating Yen and Japanese Cost-Cutting Strategies
Department or Administrative Unit
Economics
Document Type
Article
Author Copyright
© 1996 by M.E. Sharpe. Inc.
Publication Date
5-1996
Journal
Challenge
Abstract
The globalization of production has significantly changed the magnitude and timing of exchange rate adjustments based on trade flows. Today the appreciation of a currency has much less impact on the price competitiveness of a final product than when production was confined to only one country. Manufacturers are taking advantage of their international production networks to acquire input materials and components from countries with advantageous exchange rates. As a result, adjustment in trade imbalances requires larger exchange rate changes and longer time lags than in the past. This conclusion is supported by the experience of automobile trade between Japan and the United States.
Recommended Citation
Carbaugh, R., & Wassink, D. (1996). The Appreciating Yen and Japanese Cost-Cutting Strategies. Challenge, 39(3), 58–59. https://doi.org/10.1080/05775132.1996.11471905
Comments
This article was originally published in Challenge. The full-text article from the publisher can be found here.
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