A theory of the currency denomination of international

• 成果类型: Article
• 署名作者: Bacchetta, P; van Wincoop, E
• 署名单位: University of Virginia; National Bureau of Economic Research; Study Center Gerzensee; University of Lausanne; Centre for Economic Policy Research - UK
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2004.01.006
• 发表日期: 2005
• 页码: 295-319
• 关键词: currency invoicing; exchange rate pass-through; new open economy macro; Price setting; monetary union

摘要

The currency denomination of international trade has significant macroeconomic and policy implications. In this paper we solve for the optimal invoicing choice by integrating this microeconomic decision at the level of the firm into a general equilibrium open economy model. Strategic interactions between firms play a critical role. We find that the less competition firms face in foreign markets, as reflected in market share and product differentiation, the more likely they will price in their own currency. We also show that when a set of countries forms a monetary union, the new currency is likely to be used more extensively in trade than the sum of the currencies it replaces. (c) 2005 Elsevier B.V. All rights reserved.