We analyze the effects of real exchange rate volatility on the proportions of bilateral exports of nine categories of goods from the United States to seven major industrial countries using a fixed effect framework. In six of the nine categories the volatility of the real exchange rate significantly affects the value of exports and in five of these categories the effect is positive. These results are consistent with a model in which risk-neutral firms increase supply of elastically-demanded exports in response to an increase in the volatility of the real exchange rate. © 1990.