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Pricing to Market, Staggered Contracts, and Real Exchange Rate Persistence / Paul R. Bergin, Robert C. Feenstra.
- Format:
- Book
- Author/Creator:
- Bergin, Paul R.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w7026.
- NBER working paper series no. w7026
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1999.
- Summary:
- This paper offers an explanation for the persistence observed in real exchange rate movements. The model combines pricing to market behavior with sticky prices generated by staggered contracts. A translog preference structure is sued to enhance both features. The paper finds that openness limits the degree of endogenous persistence. Nevertheless, the model under reasonable parameter values can replicate the serial correlation of real exchange rate data. Further, significant exchange rate data. Further, significant exchange rate volatility can be generated, and this is amplified by the presence of endogenous persistence
- Notes:
- Print version record
- March 1999.
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