Endogenous pricing to market and financing costs
Article Abstract:
The endogenous determination of pricing to market is studied, in a real option model with time-dependent transportation costs, where the future terms of trade are random. The countries where the financing costs and the terms of trade volatility are high, the price of imports are determined by the realized real exchange rate.
Publication Name: Journal of Monetary Economics
Subject: Economics
ISSN: 0304-3932
Year: 2004
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A fundamental theory of exchange rates and direct currency trades
Article Abstract:
A nominal exchange rate is determined between currencies of two countries. Nominal exchange rate is determinate as search frictions restrict agentsE opportunities for instantaneous arbitrage. Nominal and real exchange rates are shown to move in steady state in response to money growth shocks.
Publication Name: Journal of Monetary Economics
Subject: Economics
ISSN: 0304-3932
Year: 2003
User Contributions:
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