Importers, Exporters, and Exchange Rate Disconnect



Amiti, Mary, Itskhoki, Oleg and Konings, Jozef ORCID: 0000-0003-1280-4674
(2014) Importers, Exporters, and Exchange Rate Disconnect. American Economic Review, 104 (7). 1942 - 1978.

[img] Text
ImportsAndPassThrough.pdf - Accepted Version

Download (934kB)

Abstract

Large exporters are simultaneously large importers. We show that this pattern is key to understanding low aggregate exchange rate pass-through as well as the variation in pass-through across exporters. We develop a theoretical framework with variable markups and imported inputs, which predicts that firms with high import shares and high market shares have low exchange rate pass-through. We test and quantify the theoretical mechanism using Belgian firm-product-level data on imports and exports. Small nonimporting firms have nearly complete pass-through, while large import-intensive exporters have pass-through around 50 percent, with the marginal cost and markup channels contributing roughly equally.

Item Type: Article
Depositing User: Symplectic Admin
Date Deposited: 16 Oct 2018 15:26
Last Modified: 16 Apr 2021 11:47
DOI: 10.1257/aer.104.7.1942
Related URLs:
URI: https://livrepository.liverpool.ac.uk/id/eprint/3027642