Degree of Competition and Export-Production Relative Prices when the Exchange Rate Changes: Evidence from a Panel of Czech Exporting Companies
AbstractIn this paper we show the relevance of the degree of competition for inferences about changes in export-production relative prices when the nominal exchange rate changes. We devise a model for tradable goods that combines the market competition and the pricing-tomarket literature and we empirically document the contrast between perfectly and imperfectly competitive markets for the export-production relative price responses to exchange rate changes. When the macroeconomic view is taken, a change in the degree of competition in exports (a change in the average mark-up on exported products) alternates the reaction in relative prices and quantity exported and thus requires careful policy-related consideration.
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Bibliographic InfoPaper provided by Czech National Bank, Research Department in its series Working Papers with number 2006/10.
Date of creation: Dec 2006
Date of revision:
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Degree of competition; exchange rate; pricing-to-market.;
Find related papers by JEL classification:
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
- D4 - Microeconomics - - Market Structure and Pricing
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-05-19 (All new papers)
- NEP-COM-2007-05-19 (Industrial Competition)
- NEP-MIC-2007-05-19 (Microeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Martin Cincibuch & Jiri Podpiera, 2004.
"Beyond Balassa - Samuelson: Real Appreciation in Tradables in Transition Countries,"
2004/09, Czech National Bank, Research Department.
- Martin Cincibuch & Jiří Podpiera, 2006. "Beyond Balassa-Samuelson: Real appreciation in tradables in transition countries," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 14(3), pages 547-573, 07.
- Betts, Caroline & Devereux, Michael B., 2000. "Exchange rate dynamics in a model of pricing-to-market," Journal of International Economics, Elsevier, vol. 50(1), pages 215-244, February.
- Jan Bruha & Jiri Podpiera & Stanislav Polak, 2007. "The Convergence of a Transition Economy: The Case of the Czech Republic," Working Papers 2007/3, Czech National Bank, Research Department.
- Bruha, Jan & Podpiera, Jirí, 2007. "Transition economy convergence in a two-country model: implications for monetary integration," Working Paper Series 0740, European Central Bank.
- Bruha, Jan & Podpiera, Jirí & Polák, Stanislav, 2010. "The convergence dynamics of a transition economy: The case of the Czech Republic," Economic Modelling, Elsevier, vol. 27(1), pages 116-124, January.
- Jan Bruha & Jiri Podpiera & Stanislav PolÃ¡k, 2007. "The Convergence Dynamics of a Transition Economy," IMF Working Papers 07/116, International Monetary Fund.
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