A theory of the currency denomination of international trade

Journal of International Economics

Volumn 67, Issue 2, 2005, Pages 295-319

  Bacchetta, Philippe ^c,d,e   van Wincoop, Eric ^a,b  

^a UNIVERSITY OF VIRGINIA   (United States)

^b NATIONAL BUREAU OF ECONOMIC RESEARCH   (United States)

^c Study Center Gerzensee   (Switzerland)

^d UNIVERSITY OF LAUSANNE   (Switzerland)

^e CEPR   (United Kingdom)

Author keywords

Currency invoicing; Exchange rate pass through; Monetary union; New open economy macro; Price setting

Indexed keywords

CURRENCY MARKET; EXCHANGE RATE; INTERNATIONAL TRADE;

EID: 28044433012     PISSN: 00221996     EISSN: None     Source Type: Journal    
DOI: 10.1016/j.jinteco.2004.01.006     Document Type: Article

References (42)

1. Bacchetta, Philippe, van Wincoop, Eric, 1998. Does exchange rate stability increase trade and capital flows? NBER Working Paper 6704.
2. Philippe Bacchetta Eric van Wincoop Does exchange rate stability increase trade and welfare? American Economic Review 90 2000 1093-1109
3. Philippe Bacchetta Eric van Wincoop Trade flows, prices, and the exchange rate regime. Revisiting the case for flexible exchange rates 2001 Bank of Canada 213-231
4. Bacchetta, Philippe, van Wincoop, Eric, 2002. A theory of the currency denomination of international trade. NBER WP No. 9039.
5. Philippe Bacchetta Eric van Wincoop Why do consumer prices react less than import prices to exchange rates? Journal of the European Economic Association 2003 662-670 (April-May)
6. David P. Baron Fluctuating exchange rates and the pricing of exports Economic Inquiry 14 1976 425-438
7. Giorgio Basevi Daniela Cocchi Pier Luigi Lischi The choice of currency in foreign trade of Italy In: D.R. Hodgman G.E. Wood (Eds.) Monetary and exchange rate policy 1997 St. Martin's Press New York 1-48
8. Bekx, Peter, 1998. The implications of the introduction of the euro for non-EU Countries. Euro Papers No. 26, European Commission.
9. Betts, Caroline, Devereux, Michael, 1996. The exchange rate in a model of pricing-to-market. European Economic Review 40, 1007-1021.
10. John F.O. Bilson The choice of an invoice currency in international transactions In: J.S. Bhandari B.H. Putnam (Eds.) Economic inter-dependence and flexible exchange rates 1983 MIT Press Cambridge, MA 384-401
11. Campa, Jose Manuel, Goldberg, Linda S., 2002. Exchange rate pass-through into import prices: A macro or micro phenomenon? NBER WP No. 8934.
12. Corsetti, Giancarlo, Pesenti, Paolo, 2001. International dimensions of optimal monetary policy. NBER WP No. 8230.
13. Corsetti, Giancarlo, Pesenti, Paolo, 2002. Self-validating optimum currency areas. NBER WP No. 8783.
14. Michael B. Devereux Charles Engel Monetary policy in the open economy revisited: Exchange rate flexibility and price setting behavior Review of Economic Studies 70 4 2003 765-783
15. Michael B. Devereux Charles Engel Peter E. Storgaard Endogenous exchange rate pass-through when nominal prices are set in advance Journal of International Economics 63 2004 263-291
16. Shabtai Donnenfeld Itzhak Zilcha Pricing of exports and exchange rate uncertainty International Economic Review 32 1991 1009-1022
17. Charles Engel The responsiveness of consumer prices to exchange rates and the implications for exchange-rate policy: A survey of a few recent new open-economy macro models The Manchester School 70 2002 1-15 (Supplement)
18. Charles Engel Expenditure switching and exchange rate policy NBER Macroeconomics Annual 17 2002 231-272
19. Engel Charles John H. Rogers Deviations from purchasing power parity: causes and welfare costs Journal of International Economics 55 2001 29-57
20. Robert C. Feenstra Joseph E. Gagnon Michael M. Knetter Market share and exchange rate pass-through in world automobile trade Journal of International Economics 40 1996 187-207
21. Robert M. Feinberg The interaction of foreign exchange and market power effects on German domestic prices The Journal of Industrial Economics 35 1 1986 61-70
22. Richard Friberg In which currency should exporters set their prices? Journal of International Economics 45 1998 59-76
23. Alberto Giovannini Change rates and traded goods prices Journal of International Economics 24 1988 45-68
24. Goldberg, Pinelopi Koujianou, Knetter, Michael M., 1997. Goods prices and exchange rates: What have we learned? Journal of Economic Literature 35 (2), 1243-1272.
25. Koichi Hamada Akiyoshi Horiuchi Monetary, financial, and real effects of yen internationalization In: S.W. Arndt D.J. Richardson (Eds.) Real-financial linkages among open economies 1987 MIT Press Cambridge, MA 167-191
26. Philipp Hartmann The currency denomination of world trade after European monetary union Journal of the Japanese and International Economies 12 1998 424-454
27. Hooper, Peter, Johnson, Karen, Marquez, Jaime, 1998. Trade elasticities for G-7 countries. International Finance Discussion Papers no. 609, Board of Governors.
28. Hummels, David, 1999. Toward a geography of trade costs. Mimeo, University of Chicago.
29. Martin Johnson Daniel Pick Currency quandary: The choice of invoicing currency under exchange-rate uncertainty Review of International Economics 5 1 1997 118-128
30. Paul D. Klemperer Margaret A. Meyer Price competition vs. quantity competition: The role of uncertainty Rand Journal of Economics 17 1986 618-638
31. Philip R. Lane The new open economy macroeconomics: A survey Journal of International Economics 54 2001 235-266
32. McCarthy, Jonathan, 1999. Pass-through of exchange rates and import prices to domestic inflation in some industrialized economies. Working Paper No. 79, Bank for International Settlements.
33. Maurice Obstfeld International macroeconomics: Beyond the Mundell-Fleming Model IMF Staff Papers 47 2001 1-39 (Special Issue)
34. Maurice Obstfeld Exchange rates and adjustment: Perspectives from the new open economy macroeconomics Monetary and Economic Studies 2002 23-46 (Special Edition, December)
35. Maurice Obstfeld Kenneth Rogoff Foundations of international macroeconomics 1996 MIT Press Cambridge, MA
36. Oi, Walter Y., 1961. The desirability of price instability under perfect competition. Econometrica 29, 58-64.
37. S.A.B. Page The choice of invoicing currency in merchandise trade National Institute Economic Review 81 3 1980 60-72
38. Helene Rey International trade and currency exchange Review of Economic Studies 68 2001 443-464
39. Sutherland, Alan, 2002. Incomplete pass-through and the welfare effects of exchange rate variability. Mimeo, University of St. Andrews.
40. Tille, Cedric, 2002. On the distributional effects of exchange rate fluctuations. Federal Reserve Bank of New York Staff Report 146, March 2002.
41. Jean-Marie Viaene Casper G. de Vries On the design of invoicing practices in international trade Open Economies Review 3 1992 133-142
42. Jiawen Yang Exchange rate pass-through in U.S. manufacturing industries The Review of Economics and Statistics 79 1997 95-104