Impacts of the US dollar (USD) exchange rate on economic growth and the environment in the United States

Jaeseok Lee; Chengyan Yue

doi:10.1016/j.eneco.2017.03.006

Impacts of the US dollar (USD) exchange rate on economic growth and the environment in the United States

Jaeseok Lee, Chengyan Yue

Horticultural Science

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Abstract

This paper investigates the impact of the USD exchange rate on economic growth and the environment in the United States by using a Structural Vector Autoregression (SVAR) model. The analysis is based on quarterly country-level data on the real trade weighted US dollar index, petroleum consumption, renewable energy consumption, net imports of pollution intensive products, real GDP and CO₂ emissions during the 1989–2015. The result shows that the USD exchange rate is positively related to petroleum consumption, net imports of the United States in pollution intensive industries with major U.S. trading partners, real GDP and CO₂ emissions. Moreover, petroleum consumption increases real GDP and domestic CO₂ emission levels, while net imports of pollution intensive products decrease real GDP and does not significantly affect CO₂ emissions.

Original language	English (US)
Pages (from-to)	170-176
Number of pages	7
Journal	Energy Economics
Volume	64
DOIs	https://doi.org/10.1016/j.eneco.2017.03.006
State	Published - May 1 2017

Keywords

Economic growth
Energy consumption
Environment
International trade
Pollution intensive industries
Structural Vector Autoregression (SVAR)
USD exchange rate

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

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title = "Impacts of the US dollar (USD) exchange rate on economic growth and the environment in the United States",

abstract = "This paper investigates the impact of the USD exchange rate on economic growth and the environment in the United States by using a Structural Vector Autoregression (SVAR) model. The analysis is based on quarterly country-level data on the real trade weighted US dollar index, petroleum consumption, renewable energy consumption, net imports of pollution intensive products, real GDP and CO2 emissions during the 1989–2015. The result shows that the USD exchange rate is positively related to petroleum consumption, net imports of the United States in pollution intensive industries with major U.S. trading partners, real GDP and CO2 emissions. Moreover, petroleum consumption increases real GDP and domestic CO2 emission levels, while net imports of pollution intensive products decrease real GDP and does not significantly affect CO2 emissions.",

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N2 - This paper investigates the impact of the USD exchange rate on economic growth and the environment in the United States by using a Structural Vector Autoregression (SVAR) model. The analysis is based on quarterly country-level data on the real trade weighted US dollar index, petroleum consumption, renewable energy consumption, net imports of pollution intensive products, real GDP and CO2 emissions during the 1989–2015. The result shows that the USD exchange rate is positively related to petroleum consumption, net imports of the United States in pollution intensive industries with major U.S. trading partners, real GDP and CO2 emissions. Moreover, petroleum consumption increases real GDP and domestic CO2 emission levels, while net imports of pollution intensive products decrease real GDP and does not significantly affect CO2 emissions.

AB - This paper investigates the impact of the USD exchange rate on economic growth and the environment in the United States by using a Structural Vector Autoregression (SVAR) model. The analysis is based on quarterly country-level data on the real trade weighted US dollar index, petroleum consumption, renewable energy consumption, net imports of pollution intensive products, real GDP and CO2 emissions during the 1989–2015. The result shows that the USD exchange rate is positively related to petroleum consumption, net imports of the United States in pollution intensive industries with major U.S. trading partners, real GDP and CO2 emissions. Moreover, petroleum consumption increases real GDP and domestic CO2 emission levels, while net imports of pollution intensive products decrease real GDP and does not significantly affect CO2 emissions.

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KW - Energy consumption

KW - Environment

KW - International trade

KW - Pollution intensive industries

KW - Structural Vector Autoregression (SVAR)

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Impacts of the US dollar (USD) exchange rate on economic growth and the environment in the United States

Abstract

Keywords

UN SDGs

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