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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| Department/Agency | Bank of Canada. |
|---|---|
| Title | Exchange rate pass-through, currency of invoicing and market share / by Michael B. Devereux, Wei Dong and Ben Tomlin. |
| Series title | Bank of Canada working paper, 1701-9397 ; 2015-31 |
| Publication type | Series - View Master Record |
| Language | [English] |
| Format | Electronic |
| Electronic document | |
| Note(s) | "August 2015." Includes bibliographical references. |
| Publishing information | Ottawa : Bank of Canada, 2015. |
| Author / Contributor | Devereux, Michael P. Tomlin, Ben. Dong, Wei. |
| Description | iii, 37 p. : fig., graphs, tables. |
| Catalogue number |
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| Subject terms | Markets Exchange rates Currency International trade |
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