Title

The Appreciating Yen and Japanese Cost-Cutting Strategies

Document Type

Article

Department or Administrative Unit

Economics

Publication Date

5-1996

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.

Comments

This article was originally published in Challenge. The full-text article from the publisher can be found here.

Due to copyright restrictions, this article is not available for free download from ScholarWorks @ CWU.

Journal

Challenge

Rights

© 1996 by M.E. Sharpe. Inc.

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