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How Important is the Currency Denomination of Exports in Open Economy Models?

  • Margarida Duarte

    (University of Toronto)

  • Michael Dotsey

    (Federal Reserve Bank Philadelphia)

We show in a quantitative open-economy model that standard alternative assumptions about the currency in which firms price export goods are virtually inconsequential for the properties of aggregate variables, other than the terms of trade. This result is in contrast to a large literature that emphasizes the importance of the currency denomination of exports for the properties of open-economy models.

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File URL: https://economicdynamics.org/meetpapers/2011/paper_380.pdf
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Paper provided by Society for Economic Dynamics in its series 2011 Meeting Papers with number 380.

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Date of creation: 2011
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Handle: RePEc:red:sed011:380
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Society for Economic Dynamics Marina Azzimonti Department of Economics Stonybrook University 10 Nicolls Road Stonybrook NY 11790 USA

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