Beggar-Thy-Neighbor or Beggar-Thyself? The Income Effect of Exchange Rate Fluctuations

41 Pages Posted: 29 Sep 2006

See all articles by Cédric Tille

Cédric Tille

Graduate Institute of International and Development Studies (HEI)

Date Written: September 2000

Abstract

This paper analyzes the impact of exchange rate fluctuations when they are only partially passed through to consumer prices. We show that an exchange rate depreciation does not necessarily have a beggar-thy-neighbor effect and may in fact have an opposite, or beggar-thyself, effect. The direction of the welfare effect depends on who owns the firms importing goods from producers and selling them to consumers, an issue that has not been explored in the earlier literature.

Keywords: beggar-thy-neighbor, imports distribution

JEL Classification: F31, F41, F42

Suggested Citation

Tille, Cedric, Beggar-Thy-Neighbor or Beggar-Thyself? The Income Effect of Exchange Rate Fluctuations (September 2000). Federal Reserve Bank of New York Research Paper Series - Staff Report, No. 112, 2000. Available at SSRN: https://ssrn.com/abstract=933337 or http://dx.doi.org/10.2139/ssrn.933337

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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