International Prices and Exchange Rates

Handbook of International Economics

Volumn 4, Issue , 2014, Pages 391-451

  Burstein, Ariel ^a,b   Gopinath, Gita ^b,c  

^a UNIVERSITY OF CALIFORNIA   (United States)

^b NATIONAL BUREAU OF ECONOMIC RESEARCH   (United States)

^c HARVARD UNIVERSITY   (United States)

Author keywords

Border prices; Nominal exchange rate; Pass through; Price rigidity; Real exchange rate; Tradeable goods; Variable markups

Indexed keywords

EID: 84894258950     PISSN: 15734404     EISSN: None     Source Type: Book Series    
DOI: 10.1016/B978-0-444-54314-1.00007-0     Document Type: Chapter

References (110)

1. Alessandria G. Consumer search, price dispersion and international relative price volatility. International Economic Review 2009, 50(3):803-829.
2. Alessandria G., Kaboski J.P. Pricing-to-market and the failure of absolute PPP. American Economic Journal: Macroeconomics 2011, 3(1):91-127.
3. Alessandria G., Kaboski J.P., Midrigan V. Inventories, lumpy trade, and large devaluations. American Economic Review 2010, 100(5):2304-2339.
4. Alvarez, F., Neumeyer, A., Gonzalez-Rozada, M., Beraja, M., 2011. From Hyperinflation to Stable Prices: Argentina's Evidence on Menu Cost Models. Working Paper.
5. Amiti, M., Itskhoki, O., Konings, J., 2012. Importers, Exporters and Exchange Rate Disconnect. Working Paper.
6. Arkolakis, C., Costinot, A., Donaldson, D., Rodriguez-Clare, A., 2012. The Elusive Pro-competitive Effects of Trade. Working Paper, MIT.
7. Asea P.K., Mendoza E.G. The Balassa-Samuelson model: a general-equilibrium appraisal. Review of International Economics 1994, 2(3):244-267.
8. Atkeson A., Burstein A. Trade costs, pricing-to-market, and international relative prices. American Economic Review 2008, 98(5):1998-2031.
9. Auer R., Chaney T. Exchange rate pass-through in a competitive model of pricing-to-market. Journal of Money, Credit and Banking 2009, 41(s1):151-175.
10. Auer, R., Schoenle, R., 2012. Market Structure and Exchange Rate Pass-through. Working Paper.
11. Bacchetta P., van Wincoop E. A Theory of the Currency Denomination of International Trade. Journal of International Economics 2005, 67(2):295-319.
12. Backus D.K., Smith G.W. Consumption and real exchange rates in dynamic economies with non-traded goods. Journal of International Economics 1993, 35(3-4):297-316.
13. Baxter M., Stockman A.C. Business cycles and the exchange-rate regime: some international evidence. Journal of Monetary Economics 1989, 23(3):377-400.
14. Berger, D., Faust, J., Rogers, J.H., Steverson, K., 2009. Border Prices and Retail Prices. Board of Governors of the Federal Reserve, International Finance Discussion Paper No. 972.
15. Bergin P., Feenstra R. Pricing to market, staggered contracts and real exchange rate perisistence. Journal of International Economics 2001, 54(2):333-359.
16. Berman N., Martin P., Mayer T. How do different exporters react to exchange rate changes? Theory, empirics and aggregate implications. Quarterly Journal of Economics 2012, 127(1):437-492.
17. Betts C., Kehoe T. U.S. real exchange rate fluctuations and relative price fluctuations. Journal of Monetary Economics 2006, 153:1297-1326.
18. Boivin J., Clark R., Vincent N. Virtual borders. Journal of International Economics 2012, 86(2):327-335.
19. Broda, C. Weinstein, D. 2008. Understanding International Price Differences Using Barcode Data. NBER Working Paper 14017.
20. Burdett K., Judd K. Equilibrium price dispersion. Econometrica 1983, 51(4):955-969.
21. Burstein, A., Jaimovich, N., 2008. Understanding Movements in Aggregate and Product-level Real Exchange Rates. UCLA Working Paper.
22. Burstein A., Neves J., Rebelo S. Distribution costs and real exchange dynamics during exchange-rate-based stabilizations. Journal of Monetary Economics 2003, 50(6):1189-1214.
23. Burstein A., Eichenbaum M., Rebelo S. Large devaluations and the real exchange rate. Journal of Political Economy 2005, 113(4):742-784.
24. Burstein A., Eichenbaum M., Rebelo S. The importance of the nontradable goods' prices in cyclical real exchange rate fluctuations. Japan and the World Economy 2006, 18(3):247-253.
25. Burstein A., Eichenbaum M., Rebelo S. Modeling exchange rate passthrough after large devaluations. Journal of Monetary Economics 2007, 54(2):346-368.
26. Calvo G. Staggered prices in a utility-maximizing framework. Journal of Monetary Economics 1983, 12(3):383-398.
27. Campa J., Goldberg L. Exchange rate pass through into import prices. Review of Economics and Statistics 2005, 87(4):679-690.
28. Campa J., Goldberg L. The sensitivity of the CPI to exchange rates: distribution margins, imported inputs, and trade exposure. Review of Economics and Statistics 2010, 92(2):392-407.
29. Carvalho C., Nechio F. Aggregation and the PPP puzzle in a sticky-price model. American Economic Review 2011, 101(6):2391-2424.
30. Cavallo, A., Neiman, B., Rigobon, R., 2012. Product Introductions, Currency Unions, and the Real Exchange Rate. Working Paper.
31. Chari V., Kehoe P., McGrattan E. Can sticky price models generate volatile and persistent exchange rates?. Review of Economic Studies 2002, 69(3):533-563.
32. Chatterjee A., Carneiro R.D., Vichyanond J. Multi-product firms and exchange rate fluctuations. American Economic Journal, Economic Policy 2012, 5(2):77-110.
33. Chen S.-S., Engel C. Does 'aggregation bias' explain the PPP puzzle?. Pacific Economic Review 2005, 10(1):49-72.
34. Cheung Y.-W., Lai K.S. On the purchasing power parity puzzle. Journal of International Economics 2000, 52(2):321-330.
35. Corsetti G., Dedola L. A macroeconomic model of international price discrimination. Journal of International Economics 2005, 67(1):129-155.
36. Corsetti G., Dedola L., Leduc S. High exchange-rate volatility and low pass-through. Journal of Monetary Economics 2008, 55(6):1113-1128.
37. Cravino, J., 2012. Exchange Rates, Aggregate Productivity and the Currency of Invoicing of International Trade. Working Paper.
38. Crucini, M. Landry, A. 2012. Accounting for Real Exchange Rates Using Micro Data. NBER Working Paper No. 17812.
39. Crucini, M., Telmer, C., 2012. Microeconomic Sources of Real Exchange Rate Variability. Working Paper.
40. Crucini M., Telmer C., Zachariadis M. Understanding European real exchange rates. American Economic Review 2005, 95(23):724-738.
41. Crucini M.J., Shintani M., Tsuruga T. Accounting for persistence and volatility of good-level real exchange rates: the role of sticky information. Journal of International Economics 2010, 81(1):48-60.
42. de Blas, B., Russ, K., 2012. Understanding Markups in the Open Economy. Working Paper.
43. Devereux M.B., Engel C., Storgaard P.E. Endogenous exchange rate pass-through when nominal prices are set in advance. Journal of International Economics 2004, 63(2):263-291.
44. Dornbusch R. Exchange rate and prices. American Economic Review 1987, 77(1):93-106.
45. Drozd, L., Nosal, J., 2012a. Pricing to Market in Business Cycle Models. Working Paper, Columbia University.
46. Drozd L., Nosal J. Understanding international prices: customers as capital. American Economic Review 2012, 102(1):364-395.
47. Eichenbaum M., Evans C. Some empirical evidence on the effects of shocks to monetary policy on exchange rates. Quarterly Journal of Economics 1995, 110(4):975-1009.
48. Eichenbaum M., Jaimovich N., Rebelo S. Reference prices, costs, and nominal rigidities. American Economic Review 2011, 101(1):234-262.
49. Engel C. Real exchange rates and relative prices: an empirical investigation. Journal of Monetary Economics 1993, 32(1):35-50.
50. Engel C. Accounting for U.S. real exchange rate changes. Journal of Political Economy 1999, 107(3):507-538.
51. Engel C. Equivalence results for optimal pass-through, optimal indexing to exchange rates, and optimal choice of currency for export pricing. Journal of European Economic Association 2006, 4(6):1249-1260.
52. Engel C., Rogers J. How wide is the border?. American Economic Review 1996, 86(5):1112-1125.
53. Evans M. Exchange-Rate Dynamics 2011, Princeton University Press, NJ, USA.
54. Fama E.F. Forward and spot exchange rates. Journal of Monetary Economics 1984, 14(3):319-338.
55. Fitzgerald D. Can trade costs explain why exchange rate volatility does not feed into consumer prices?. Journal of Monetary Economics 2008, 55(3):606-628.
56. Fitzgerald, D., Haller, S., 2012. Exchange Rates and Producer Prices: Evidence from Micro Data. Stanford University, Working Paper.
57. Friberg R., Wilander F. The currency denomination of exports - a questionnaire study. Journal of International Economics 2008, 75(1):54-69.
58. Froot K., Rogoff K. Perspectives on PPP and long-run real exchange rates. Handbook of International Economics 1995, vol. 3. Elsevier.
59. Froot K.A., Klemperer P.D. Exchange rate pass-through when market share matters. American Economic Review 1989, 79(4):637-654.
60. Gagnon E. Price setting during low and high inflation: evidence from Mexico. The Quarterly Journal of Economics 2009, 124(3):1221-1263.
61. Gagnon E., Lopez-Salido D., Vincent N. Individual price adjustment along the extensive margin. NBER Macroeconomics Annual 2012, vol. 27. National Bureau of Economic Research Inc.
62. Gagnon, E., Mandel, B., Vigfusson, R., 2012b. Missing Import Price Changes and Low Exchange Rate Pass-through. International Finance Discussion Papers 1040, Board of Governors of the Federal Reserve, System (U.S.).
63. Galí J. Monetary Policy, Inflation and the Business Cycle. An Introduction to the New Keynesian Framework 2008, Princeton University Press.
64. Gautier, E., Hernando, I., Vermeulen, P., Dias, D., Dossche, M., Sabbatini, R., Stahl, H., 2007. Price Setting in the Euro Area: Some Stylised Facts from Individual Producer Price Data (February 2007). ECB Working Paper No. 727.
65. Goldberg L.S., Tille C. Vehicle currency use in international trade. Journal of International Economics 2008, 76(2):177-192.
66. Goldberg, L.S., Tille, C., 2009. Micro, Macro, and Strategic Forces in International Trade Invoicing. Working Paper.
67. Goldberg, P., Hellerstein, R., 2006. A Framework for Identifying the Sources of Local-currency Price Stability with an Empirical Application. Federal Reserve Bank of New York, Working Paper.
68. Goldberg P., Knetter M. Goods prices and exchange rates: what have we learned?. Journal of Economic Literature 1997, 35(3):1243-1272.
69. Goldberg P., Verboven F. The evolution of price dispersion in the European car market. Review of Economic Studies 2001, 68(4):811-848.
70. Goldberg P.K., Hellerstein R. A structural approach to explaining incomplete exchange-rate pass-through and pricing-to-market. American Economic Review 2008, 98(2):423-429.
71. Gopinath G., Itskhoki O. Frequency of price adjustment and pass-through. Quarterly Journal of Economics 2010, 125(2):675-727.
72. Gopinath G., Itskhoki O. In search of real rigidities. NBER Macroeconomics Annual 2010, vol. 25. University of Chicago Press.
73. Gopinath G., Rigobon R. Sticky borders. Quarterly Journal of Economics 2008, 123(2):531-575.
74. Gopinath G., Itskhoki O., Rigobon R. Currency choice and exchange rate pass-through. American Economic Review 2010, 100(1):306-336.
75. Gopinath, G., Gourinchas, P.-O., Hsieh, C.-T., Li, N., 2011. International Prices, Costs and Markup Differences. NBER Working Paper No. 14938.
76. Gorodnichenko Y., Tesar L. Border effect or country effect? Seattle may not be so far from Vancouver after all. American Economic Journal: Macroeconomics 2009, 1(1):219-241.
77. Gust C., Leduc S., Vigfusson R. Trade integration, competition, and the decline in exchange-rate pass-through. Journal of Monetary Economics 2010, 57(3):309-324.
78. Hansen B. The grid bootstrap and autoregressive model. Review of Economics and Statistics 1999, 81(4):594-607.
79. Hau H. Real exchange rate volatility and economic openness: theory and evidence. Journal of Money, Credit and Banking 2002, 34(3):611-630.
80. Hellerstein R. Who bears the cost of a change in the exchange rate?. Journal of International Economics 2008, 76:14-32.
81. Imbs, J., Mumtaz, H., Ravn, M., Rey, H., 2004. Aggregation Bias Does Explain the PPP Puzzle. Working Paper.
82. Imbs J., Mumtaz H., Ravn M., Rey H. PPP strikes back: aggregation bias and the real exchange rate. Quarterly Journal of Economics 2005, 120(1):1-43.
83. Kasa K. Adjustment costs and pricing-to-market theory and evidence. Journal of International Economics 1992, 32(1-2):1-30.
84. Kehoe, P., Midrigan, V., 2007. Sticky Prices and Real Exchange Rates in the Cross-section. Working Paper, NYU.
85. Kehoe T.J., Ruhl K.J. Sudden stops, sectoral reallocations, and the real exchange rate. Journal of Development Economics 2009, 89(2):235-249.
86. Kimball M. The quantitative analytics of the basic neomonetarist model. Journal of Money, Credit and Banking 1995, 27:1241-1277.
87. Klenow, P., Willis, J., 2006. Real Rigidities and Nominal Price Changes. Stanford Working Paper.
88. Klenow P.J., Malin B. Microeconomic evidence on price-setting. Handbook of Monetary Economics 2011, North-Holland. B. Friedman, M. Woodford (Eds.).
89. Knetter M. Price discrimination by U.S. and German exporters. American Economic Review 1989, 79(1):198-210.
90. Knetter M. International comparison of price-to-market behavior. American Economic Review 1993, 83(3):473-486.
91. Krugman P. Pricing to market when the exchange rate changes. Real Financial Linkages Among Open Economies 1987, 49-70. MIT Press, Cambridge. S. Arndt, J. Richardson (Eds.).
92. Lapham B.J. A dynamic general equilibrium analysis of deviations from the laws of one price. Journal of Economic Dynamics and Control 1995, 19(8):1355-1389.
93. Melitz M.J., Ottaviano G.I.P. Market size, trade, and productivity. Review of Economic Studies 2008, 75(1):295-316.
94. Midrigan V. International price dispersion in state-dependent pricing models. Journal of Monetary Economics 2007, 54(8):2231-2250.
95. Murray C.J., Papell D.H. The purchasing power parity persistence paradigm. Journal of International Economics 2002, 56(1):1-19.
96. Mussa M. Nominal exchange rate regimes and the behavior of real exchange rates: evidence and implications. Public Policy, Carnegie Rochester Conference Series 25 1986.
97. Nakamura E., Steinsson J. Five facts about prices: a re-evaluation of menu cost models. Quarterly Journal of Economics 2008, 123(4):1415-1464.
98. Nakamura E., Steinsson J. Lost in transit: product replacement bias and pricing to market. American Economic Review 2012, 102(7):3277-3316.
99. Nakamura E., Zerom D. Accounting for incomplete pass-through. Review of Economic Studies 2010, 77(3):1192-1230.
100. Obstfeld M., Rogoff K. The six major puzzles in international macroeconomics: is there a common cause?. NBER Macroeconomics Annual 2000, 2000(15):339-412.
101. Pennings, S., 2012. Pass-through of Competitors Exchange Rates. Mimeo, New York University.
102. Ravn M., Schmitt-Grohe S., Uribe M. Deep habits. Review of Economic Studies 2006, 73(1):195-218.
103. Ravn M.O., Schmitt-Groh S., Uribe M. Pricing to habits and the law of one price. American Economic Review 2007, 97(2):232-238.
104. Rebelo, S., Vegh, C.A., 1995. Real effects of exchange rate-based stabilization: an analysis of competing theories. NBER Working Paper 5197.
105. Reidel, D., Szilagyi, I., 2005. A Biased View of PPP. Mimeo, Harvard University.
106. Rogoff K. The purchasing power parity puzzle. Journal of Economic Literature 1996, 34:647-668.
107. Rossi B. Confidence intervals for half-life deviations from purchasing power parity. Journal of Business and Economic Statistics 2005, 23(4):432-442.
108. Ruhl, K.J., 2008. The International Elasticity Puzzle. Working Paper.
109. Simonovska, I., 2010. Income Differences and Prices of Tradables. Working Paper, UC Davis.
110. Steinsson J. The dynamic behavior of the real exchange rate in sticky price models. American Economic Review 2008, 98(1):519-533.