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Stickiness, synchronization, and passthrough in intrafirm trade prices

  • Neiman, Brent

About 40 percent of all U.S. international trades occurs between related parties, or intrafirm, such as trades between a parent and subsidiary of the same multinational corporation. This paper uses a transaction-level dataset that distinguishes arm's length from intrafirm trades to demonstrate that for differentiated products, intrafirm prices are characterized by (1) less stickiness, (2) less synchronization, and (3) greater exchange rate passthrough.

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Article provided by Elsevier in its journal Journal of Monetary Economics.

Volume (Year): 57 (2010)
Issue (Month): 3 (April)
Pages: 295-308

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Handle: RePEc:eee:moneco:v:57:y:2010:i:3:p:295-308
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505566

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  1. Barro, Robert J., 1977. "Long-term contracting, sticky prices, and monetary policy," Journal of Monetary Economics, Elsevier, vol. 3(3), pages 305-316, July.
  2. Brent Neiman, 2009. "A State-Dependent Model of Intermediate Goods Pricing," Working Papers 2010-006, Becker Friedman Institute for Research In Economics.
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  13. Subramanian Rangan & Robert Z. Lawrence, 1993. "The Responses of U.S. Firms to Exchange Rate Fluctuations: Piercing the Corporate Veil," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 24(2), pages 341-379.
  14. Clausing, Kimberly A., 2003. "Tax-motivated transfer pricing and US intrafirm trade prices," Journal of Public Economics, Elsevier, vol. 87(9-10), pages 2207-2223, September.
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  17. Jiawen Yang, 1997. "Exchange Rate Pass-Through In U.S. Manufacturing Industries," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 95-104, February.
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