In which currency should exporters set their prices?
The writer examines the choice of price setting currency for an exporter confronted with the choice of setting price in his own, in the importer's, or in a third currency under exchange rate uncertainty. He argues that sufficient conditions on demand and cost functions for exchange rate pass-throug...
| Published in: | Journal of International Economics Vol. 45; no. 1; pp. 59 - 77 |
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| Format: | Article |
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Elsevier Science
June 1998
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| Subjects: | |
| Online Access: | View this record in EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=512661488&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 512661488 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00221996 IEM jtl: Journal of International Economics issn: 00221996 maglogo: N pubinfo: dt: June 1998 vid: 45 iid: 1 pid: 467 pub: Elsevier Science artinfo: ui: 512661488 10.1016/S0022-1996(97)00035-4 ppf: 59 ppct: 18 formats: tig: atl: In which currency should exporters set their prices? aug: au: Friberg, Richard su: Pricing Terms of trade Foreign exchange Uncertainty Economics sug: subj: Pricing Terms of trade Foreign exchange Uncertainty Economics ab: The writer examines the choice of price setting currency for an exporter confronted with the choice of setting price in his own, in the importer's, or in a third currency under exchange rate uncertainty. He argues that sufficient conditions on demand and cost functions for exchange rate pass-through to be less than unity under certainty are also sufficient conditions for price setting in the importer's currency to generate the highest anticipated profit under exchange rate uncertainty. In addition, he contends that under the same conditions on demand and cost functions, setting price in the importer's currency maximizes anticipated utility when risk aversion and forward currency markets are introduced. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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