Title of article
Trade integration,competition,andthedeclineinexchange-rate pass-through
Author/Authors
Christopher Gust، نويسنده ,
Issue Information
روزنامه با شماره پیاپی سال 2010
Pages
16
From page
309
To page
324
Abstract
Over thepast20years,U.S.importpriceshavebecomelessresponsivetotheexchange
rate.Weproposethatasignificantportionofthisdeclineisaresultofincreasedtrade
integration.Toillustratethiseffect,wedevelopanopeneconomyDGEmodelfeaturing
demandcurveswithvariableelasticitiessothatafirm’spricingdecisiondependsonits
competitors’prices.Asaresult,aforeignexporterfindsitoptimaltovaryitsmarkupin
responsetoshocksthatchangetheexchangerate,insulatingimportpricesfrom
exchangeratemovements.Withincreasedtradeintegration,exportershavebecome
more responsivetothepricesoftheircompetitors,explainingasizeableportionofthe
observeddeclineinthesensitivityofU.Simportpricestotheexchangerate
Keywords
Pass-throughTrade integration
Journal title
Journal of Monetary Economics
Serial Year
2010
Journal title
Journal of Monetary Economics
Record number
846393
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