International Prices and Exchange Rates

67 Pages Posted: 22 Feb 2013 Last revised: 13 Jun 2022

See all articles by Ariel T. Burstein

Ariel T. Burstein

University of California, Los Angeles (UCLA) - Department of Economics

Gita Gopinath

International Monetary Fund (IMF); Harvard University - Department of Economics; National Bureau of Economic Research (NBER)

Date Written: February 2013

Abstract

We survey the recent empirical and theoretical developments in the literature on the relation between prices and exchange rates. After updating some of the major findings in the empirical literature we present a simple framework to interpret this evidence. We review theoretical models that generate insensitivity of prices to exchange rate changes through variable markups, both under flexible prices and nominal rigidities, first in partial equilibrium and then in general equilibrium.

Suggested Citation

Burstein, Ariel T. and Gopinath, Gita, International Prices and Exchange Rates (February 2013). NBER Working Paper No. w18829, Available at SSRN: https://ssrn.com/abstract=2222516

Ariel T. Burstein (Contact Author)

University of California, Los Angeles (UCLA) - Department of Economics ( email )

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Gita Gopinath

International Monetary Fund (IMF) ( email )

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Harvard University - Department of Economics ( email )

Littauer Center
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United States

National Bureau of Economic Research (NBER) ( email )

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