Download This PaperThe Effect of the Dollar on Trade Prices
26 Pages Posted: 3 Dec 2020
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The Effect of the Dollar on Trade Prices
Date Written: 2020
Abstract
This paper provides evidence on the effect of the dollar exchange rate on international trade prices, employing a new instrument for the U.S. dollar based on U.S. domestic housing activity (Ma and Zhang (2019)). In line with the dominant currency paradigm (Gopinath et al. (2020)), when instrumenting the dollar, we find evidence for a perfect pass-through of the dollar exchange rate to import prices that are invoiced in dollars.
Keywords: dominant currency, dollar invoicing, international trade
JEL Classification: F140, f310, G150
Suggested Citation: Suggested Citation
Sai Ma (Contact Author)
Board of Governors of the Federal Reserve System ( email )
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Washington, DC 20551
United States
202-452-2870 (Phone)
HOME PAGE: http://saimaecon.com
Tim Schmidt-Eisenlohr
Board of Governors of the Federal Reserve System ( email )
20th Street and Constitution Avenue NW
Washington, DC 20551
United States
Shaojun Zhang
The Ohio State University
2100 Neil Avenue
Columbus, OH 43210-1144
United States
HOME PAGE: http://sites.google.com/view/zhangshaojun