Importers, Exporters, and Exchange Rate Disconnect

Amiti, Mary, Itskhoki, Oleg and Konings, Jozef (2014) Importers, Exporters, and Exchange Rate Disconnect. American Economic Review, 104 (7). pp. 1942-1978.

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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
Uncontrolled Keywords:	38 Economics, 3801 Applied Economics, 3802 Econometrics
Depositing User:	Symplectic Admin
Date Deposited:	16 Oct 2018 15:26
Last Modified:	22 Jun 2024 09:01
DOI:	10.1257/aer.104.7.1942
Related URLs:	Publisher
URI:	https://livrepository.liverpool.ac.uk/id/eprint/3027642