State dependent pricing, invoicing currency, and exchange rate pass-through

• 成果类型: Article
• 署名作者: Floden, Martin; Wilander, Fredrik
• 署名单位: Stockholm School of Economics; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2005.08.002
• 发表日期: 2006
• 页码: 178-196
• 关键词: exchange rate pass-through; nominal rigidities; Invoicing; state dependent pricing; invoicing currency

摘要

We analyze exchange rate pass-through and volatility of import prices in a dynamic framework where firms are subject to menu costs and decide on price adjustments in response to exchange rate innovations. The exchange rate pass-through and import price volatility then depend on the invoicing currency in combination with functional forms of cost and demand fanctions. In particular, there is lower pass-through, less frequent price adjustments, and lower price volatility when prices are set in the importer's currency than when prices are set in the exporter's currency. (c) 2005 Elsevier B.V. All rights reserved.