State dependent pricing, invoicing currency, and exchange rate pass-through.
We analyze exchange rate pass-through and volatility of import prices in a dynamic framework where firms are subject to menu costs and decide on price adjustments in response to exchange rate innovations. The exchange rate pass-through and import price volatility then depend on the invoicing currenc...
| Publicado en: | Journal of International Economics Vol. 70; no. 1; pp. 177 - 197 |
|---|---|
| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
Elsevier Science
September 2006
|
| Materias: | |
| Acceso en línea: | Ver este registro en EBSCOhost |
| Sumario: | We analyze exchange rate pass-through and volatility of import prices in a dynamic framework where firms are subject to menu costs and decide on price adjustments in response to exchange rate innovations. The exchange rate pass-through and import price volatility then depend on the invoicing currency in combination with functional forms of cost and demand functions. In particular, there is lower pass-through, less frequent price adjustments, and lower price volatility when prices are set in the importer's currency than when prices are set in the exporter's currency. Copyright (c) 2006 Elsevier B.V. |
|---|