On the Distributional Effects of Exchange Rate Fluctuations

33 Pages Posted: 31 Jul 2006

See all articles by Cédric Tille

Cédric Tille

Graduate Institute of International and Development Studies (HEI)

Date Written: March 2002

Abstract

The paper studies the differential impact of exchange rate fluctuations on households in a country. I extend earlier research by relaxing the assumption of complete international sectoral specialization. My setup allows for the presence of several different sectors in a given country, each producing a different type of good. Combined with incomplete asset markets, the sectoral dimension leads to a heterogenous impact of exchange rate fluctuation within each country. In particular, although a depreciation of a country's currency has an adverse "beggar-thyself" effect for the country as a whole, a minority of households benefit.

Keywords: welfare, exchange rate fluctuations, international competitiveness

JEL Classification: F31, F41, F42

Suggested Citation

Tille, Cedric, On the Distributional Effects of Exchange Rate Fluctuations (March 2002). FRB of New York Staff Report No. 146. Available at SSRN: https://ssrn.com/abstract=920861 or http://dx.doi.org/10.2139/ssrn.920861

Cedric Tille (Contact Author)

Graduate Institute of International and Development Studies (HEI) ( email )

PO Box 136
Geneva, CH-1211
Switzerland

HOME PAGE: http://sites.google.com/site/cedrictilleheid/home

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