Exchange rate pass-through, currency of invoicing and market share / by Michael B. Devereux, Wei Dong and Ben Tomlin. : FB3-2/115-31E-PDF

This paper investigates the impact of market structure on the joint determination of exchange rate pass-through and currency of invoicing in international trade. A novel feature of the study is the focus on market share of firms on both sides of the market— that is, exporting firms and importing firms. A model of monopolistic competition with heterogeneous firms has the following set of predictions: a) exchange rate pass-through should be non-monotonic and U-shaped in the market share of exporting firms, but monotonically declining in the market share of importers; b) exchange rate pass-through should be lower, the higher is local currency invoicing of imports; and c) producer currency invoicing should be related non-monotonically and U-shaped to exporter market share, and monotonically declining in importing firms’ market share.

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Renseignements sur la publication
Ministère/Organisme Bank of Canada.
Titre Exchange rate pass-through, currency of invoicing and market share / by Michael B. Devereux, Wei Dong and Ben Tomlin.
Titre de la série Bank of Canada working paper, 1701-9397 ; 2015-31
Type de publication Série - Voir l'enregistrement principal
Langue [Anglais]
Format Électronique
Document électronique
Note(s) "August 2015."
Includes bibliographical references.
Information sur la publication Ottawa : Bank of Canada, 2015.
Auteur / Contributeur Devereux, Michael P.
Tomlin, Ben.
Dong, Wei.
Description iii, 37 p. : fig., graphs, tables.
Numéro de catalogue
  • FB3-2/115-31E-PDF
Descripteurs Markets
Exchange rates
Currency
International trade
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