A Model of International Cities: Implications for Real Exchange Rates
We develop a model of international cities with each city inhabited by two representative agents, one specializing in manufacturing,ther other in distribution. Using a panel of micro=prices at the city level, we decompose the long-run cross-sectional variance of LOP deviations into the fraction due to distribution costs, trade costs anda residual. For the median good, we find trade costs account for 50 percent of the variance of real exchange rates.
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| Length: | |
| Date of creation: | 2009 |
| Date of revision: | |
| Handle: | RePEc:red:sed009:1271 |
| Contact details of provider: | Postal: Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA Web page: http://www.EconomicDynamics.org/ Email: More information through EDIRC
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- Ariel T. Burstein & Joao C. Neves & Sergio Rebelo, 2000.
"Distribution Costs and Real Exchange Rate Dynamics During Exchange-Rate-Based-Stabilizations,"
NBER Working Papers
7862, National Bureau of Economic Research, Inc.
- Burstein, Ariel T. & Neves, Joao C. & Rebelo, Sergio, 2003. "Distribution costs and real exchange rate dynamics during exchange-rate-based stabilizations," Journal of Monetary Economics, Elsevier, vol. 50(6), pages 1189-1214, September.
- Ariel T. Burstein & Joao C. Neves & Sergio Rebelo, 2000. "Distribution Costs and Real Exchange Rate Dynamics During Exchange-Rate-Based Stabilizations," RCER Working Papers 473, University of Rochester - Center for Economic Research (RCER).
- Burstein, Ariel Tomas & Neves, Joao C & Rebelo, Sérgio, 2001. "Distribution Costs and Real Exchange Rate Dynamics During Exchange-Rate-Based Stabilization," CEPR Discussion Papers 2944, C.E.P.R. Discussion Papers.
- Fernando Alvarez & Robert E. Lucas, 2005.
"General Equilibrium Analysis of the Eaton-Kortum Model of International Trade,"
NBER Working Papers
11764, National Bureau of Economic Research, Inc.
- Alvarez, Fernando & Lucas, Robert Jr., 2007. "General equilibrium analysis of the Eaton-Kortum model of international trade," Journal of Monetary Economics, Elsevier, vol. 54(6), pages 1726-1768, September.
- Andrew Atkeson & Ariel Burstein, 2007.
"Pricing-to-Market in a Ricardian Model of International Trade,"
American Economic Review,
American Economic Association, vol. 97(2), pages 362-367, May.
- Andrew Atkeson & Ariel Burstein, 2007. "Pricing-to-Market in a Ricardian Model of International Trade," NBER Working Papers 12861, National Bureau of Economic Research, Inc.
- Mario J. Crucini & Chris I. Telmer & Marios Zachariadis, 2005.
"Understanding European Real Exchange Rates,"
American Economic Review,
American Economic Association, vol. 95(3), pages 724-738, June.
- Mario J. Crucini & Chris I. Telmer & Marios Zachariadis, 2001. "Understanding European Real Exchange Rates," Vanderbilt University Department of Economics Working Papers 0120, Vanderbilt University Department of Economics.
- Mario Crucini & Chris Telmer & Marios Zachariadis, . "Understanding European Real Exchange Rates," GSIA Working Papers 227, Carnegie Mellon University, Tepper School of Business.
- Naknoi, Kanda, 2008.
"Real exchange rate fluctuations, endogenous tradability and exchange rate regimes,"
Journal of Monetary Economics,
Elsevier, vol. 55(3), pages 645-663, April.
- Kanda Naknoi, 2005. "Real exchange rate fluctuations, endogenous tradability and exchange rate regime," International Finance 0509004, EconWPA, revised 07 Nov 2005.
- Long, John B, Jr & Plosser, Charles I, 1983. "Real Business Cycles," Journal of Political Economy, University of Chicago Press, vol. 91(1), pages 39-69, February.
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