|
|
|
|
||||
|
||||
Exchange Rates, Prices and International Trade in a Model of Endogenous Market StructureHanno N. LustigUCLA - Anderson School of Management; National Bureau of Economic Research (NBER) Yunus AksoyUniversity of London, Birkbeck College, Faculty of Social Sciences, School of Economics, Mathematics and Statistics Manchester School, Vol. 75, No. 2, pp. 160-192, March 2007 Abstract: We suggest a new dynamic equilibrium approach that features product differentiation and endogenizes market structure at the same time. The model yields clear-cut predictions regarding the effects of small and large exchange rate shocks on the market structure, pass-through and international trade. First, we account for the asymmetric price adjustment process with respect to exchange rate shocks. Second, we discuss an array of conditions where short- and long-run international monetary neutrality is violated. We present in detail under which conditions imperfect competition is able to generate persistent and volatile real exchange rate deviations. Most predictions survive alternative market configurations.
Number of Pages in PDF File: 33 Accepted Paper SeriesDate posted: February 8, 2007Suggested CitationContact Information
|
|
||||||||||||||||||
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
FAQ
Terms of Use
Privacy Policy
Copyright
This page was processed by apollo1 in 0.610 seconds
Add to Cart
