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It is commonly argued that exchange rate risk hampers international trade. However, the large literature on this subject has not yet provided conclusive evidence. This paper analyzes why it is so difficult to obtain a clear answer from time series analyses. We use data on bilateral aggregate U.S. exports to the other G7 countries. The results show that, as far as the exchange rate concerns, export decisions are mostly affected by the probability distribution of the about one-year-ahead rate.doi:10.2139/ssrn.199903 fatcat:7rncltam6ngf3ozjhwiikjoua4