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Devaluation, Short-Run Supply Response, And The J-Curve, Alexander L. Brown

Honors Papers

This paper will attempt to empirically illustrate the contribution of short-run supply adjustment to the U.S. J-curve. I plan to study, on the major industry division level (2 digit SIC), 15 manufacturing sectors of the united states. Their supply movements will be calculated in terms of total short-run adjustment. These statistics will then be compared to the trade balance (J-curve) for the U.S. to see if the supply movements of U.S. manufacturers can explain the continued drop in U.S. international trade. If the theory is supported few industries will adjust quickly in the short-run, reflecting the slow adjustment of aggregate …