Pricing-to-Market and Exchange Rate Dynamics: A Primer
AbstractThis paper provides a graphical exposition for understanding Pricing-to-Market (PTM) from both the micro and macroeconomic points of view. In particular, the paper focuses on the microeconomic conditions necessary for firms to apply PTM, and on how monetary policy transmission mechanisms change when the economy is characterized by PTM, with special attention to its impact on exchange rates and other real variables. Finally, the paper attempts to determine whether, in presence of PTM, monetary policy is a beggar-thy-neighbor or prosper-thy-neighbor instrument.
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Bibliographic InfoArticle provided by SIPI Spa in its journal Rivista di Politica Economica.
Volume (Year): 96 (2006)
Issue (Month): 6 (November-December)
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Find related papers by JEL classification:
- D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- F42 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - International Policy Coordination and Transmission
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