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Author: Raphael Auer
Publisher:
ISBN:
Category : Exchange rate pass-through
Languages : en
Pages : 0
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Book Description
We study firm-level pricing behavior through the lens of exchange rate pass-through and provide new evidence on how firm-level market shares and price complementarities affect pass-through decisions. Using micro-data from U.S. import prices, we identify two facts: First, exactly the firms that react the most with their prices to changes in their own costs are also the ones that react the least to changing competitor prices. Second, the response of import Prices to exchange rate changes is U-shaped in market share while it is hump-shaped in response to competitor prices. We show that both facts are consistent with a model based on Dornbusch (1987) that generates variable markups through a nested-CES demand system. Finally, based on the model, we find that direct cost pass-through and price complementarities play approximately equally important roles in determining pass-through but also partly offset each other. This suggests that equilibrium feedback effects in pricing are large. Omission of either channel in an empirical analysis results in a failure to explain how market structure affects price-setting in industry equilibrium.
Author: Raphael Auer
Publisher:
ISBN:
Category : Exchange rate pass-through
Languages : en
Pages : 0
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Book Description
We study firm-level pricing behavior through the lens of exchange rate pass-through and provide new evidence on how firm-level market shares and price complementarities affect pass-through decisions. Using micro-data from U.S. import prices, we identify two facts: First, exactly the firms that react the most with their prices to changes in their own costs are also the ones that react the least to changing competitor prices. Second, the response of import Prices to exchange rate changes is U-shaped in market share while it is hump-shaped in response to competitor prices. We show that both facts are consistent with a model based on Dornbusch (1987) that generates variable markups through a nested-CES demand system. Finally, based on the model, we find that direct cost pass-through and price complementarities play approximately equally important roles in determining pass-through but also partly offset each other. This suggests that equilibrium feedback effects in pricing are large. Omission of either channel in an empirical analysis results in a failure to explain how market structure affects price-setting in industry equilibrium.
Author: Kanda Naknoi
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Author: William R. Smith
Publisher: Routledge
ISBN: 135175131X
Category : Business & Economics
Languages : en
Pages : 212
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Book Description
Originally published in 1996. This study looks at the impact of exchange rate fluctuation on the pricing practices of foreign industries that import into the United States market. It presents several studies of the pass-through behaviour of over 100 disaggregated commodity groups with bi-lateral exchange rates. The book presents analysis of specific competitors and their individual pricing responses to exchange rate changes, adding significantly to pricing theory as well as being useful for marketers in predicting business responses.
Author: Ahmed H. Mohamed
Publisher:
ISBN:
Category : Foreign exchange
Languages : en
Pages : 56
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Book Description
Author: A. P. Kirman
Publisher:
ISBN:
Category : Foreign exchange
Languages : en
Pages : 36
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Book Description
Author: Ehsan U. Choudhri
Publisher: International Monetary Fund
ISBN: 1475510233
Category : Business & Economics
Languages : en
Pages : 34
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Book Description
Using both regression- and VAR-based estimates, the paper finds that the exchange rate pass-through to import prices for a large number of countries is incomplete and larger than the pass-through to export prices. Previous studies have reported similar results, which give rise to the puzzle that while local currency pricing is needed to account for incomplete import price pass-through, it would not imply a lower export price pass-through. Recent explanations of this puzzle have emphasized markup adjustment in response to exchange rate changes. This paper suggests an alternative explanation based on the presence of both producer and local currency pricing. Using a dynamic general equilibrium model, the paper shows that a mix of producer and local currency pricing can explain the pass-through evidence even with a constant markup. The model can also explain the observed exchange rate and inflation variability as well as the fact that the regression and VAR estimates tend to be similar.
Author: Stephen Martin
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 52
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Book Description
Author: José Campa
Publisher:
ISBN:
Category : Foreign exchange rates
Languages : en
Pages : 68
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Author: Inĩgo Herguera
Publisher:
ISBN:
Category :
Languages : de
Pages : 31
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Author: Alan P. Kirman
Publisher:
ISBN:
Category :
Languages : de
Pages : 19
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