It is well-established in theoretical and empirical models that an exchange rate movement affects exports, but we are far from a consensus on the size and relevance of this effect. Macro-based analyses tend to yield very low values for the elasticity of exports to the exchange rate, while micro- or sectoral-based estimations tends to be higher. This column shows that one reason for the disagreement is that macro estimations fail to incorporate the characteristics of the underlying distribution of firm productivity and its asymmetries. Doing so generates higher elasticity estimates than the macro estimations, and greater country-level diversification.
For example, only about half (49%) of Millennials say the phrase “a patriotic person” describes them very well—with 35% saying this is a “perfect” description. 13 By contrast, 64% of Gen Xers, 75% of Boomers and 81% of Silents say this describes them very well. This gap may be due more to their age and stage in life than a characteristic of their generation. When Gen Xers were young, they too lagged behind their elders on this measure in a similarly worded question. 14 Millennials are also somewhat less likely than older adults to describe themselves as environmentalists—just 32% say this describes them very well, compared with at least four-in-ten among all older generations.