Title: Importers, exporters and exchange rate disconnect
Authors: Amiti, M. ×
Itskhoki, O.
Konings, Joep #
Issue Date: 2014
Publisher: American Economic Association
Series Title: The American Economic Review vol:104 issue:7 pages:1942-1978
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.
ISSN: 0002-8282
Publication status: published
KU Leuven publication type: IT
Appears in Collections:Research Center of Monetary and Information Economics, Leuven
× corresponding author
# (joint) last author

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