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Demand for Value Added and Value-Added Exchange Rates / Rudolfs Bems, Robert C. Johnson.
- Format:
- Book
- Author/Creator:
- Bems, Rudolfs.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w21070.
- NBER working paper series no. w21070
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2015.
- Summary:
- We examine the role of cross-border input linkages in governing how international relative price changes influence demand for domestic value added. We define a novel value-added real effective exchange rate (REER), which aggregates bilateral value-added price changes, and link this REER to demand for value added. Input linkages enable countries to gain competitiveness following depreciations by supply chain partners, and hence counterbalance beggar-thy-neighbor effects. Cross-country differences in input linkages also imply that the elasticity of demand for value added is country specific. Using global input-output data, we demonstrate these conceptual insights are quantitatively important and compute historical value-added REERs.
- Notes:
- Print version record
- April 2015.
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