A Structural Approach to Identifying the Sources of Local Currency Price Stability

• 成果类型: Article
• 署名作者: Goldberg, Pinelopi Koujianou; Hellerstein, Rebecca
• 署名单位: Yale University; National Bureau of Economic Research; Federal Reserve System - USA; Federal Reserve Bank - New York
• 刊物名称: REVIEW OF ECONOMIC STUDIES
• ISSN/ISSBN: 0034-6527
• DOI: 10.1093/restud/rds015
• 发表日期: 2013
• 页码: 175-210
• 关键词: menu costs; exchange-rate; pass-through; sales; MODEL; inventories; TRADE

摘要

The inertia of the local currency prices of traded goods in the face of exchange rate changes is a well-documented phenomenon in International Economics. This paper develops a structural model to identify the sources of this local currency price stability and applies it to micro-data from the beer market. The empirical procedure exploits manufacturers' and retailers' first-order conditions in conjunction with detailed information on the frequency of price adjustments following exchange rate changes to quantify the relative importance of local non-traded cost components, markup adjustment by manufacturers and retailers, and nominal price rigidities in the incomplete transmission of such changes to prices. We find that, on average, approximately 60% of the incomplete exchange rate pass-through is due to local non-traded costs; 8% to markup adjustment; 30% to the existence of own brand price adjustment costs; and 1% to the indirect/strategic effect of such costs, though these results vary considerably across individual brands according to their market shares.