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Are exchange rates and unemployment rates related? If so, how?
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Are exchange rates and unemployment rates related? If so, how?
Are exchange rates and unemployment rates related? If so, how?
Textbook
Macroeconomics
Edition:
3
rd
Authors:
Acemoglu, Laibson, List
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Yes, exchange rates and unemployment rates are related. This is because if a currency appreciates, there is a decreased demand for its products worldwide. Due to this decrease in demand for its products, labor demand decreases, which causes unemployment. Conversely, if a currency depreciates, it will cause a reduction in unemployment.
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