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

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  • Michael Dotsey
  • Margarida Duarte

Abstract

We show 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, in a quantitative open-economy model. 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.

Suggested Citation

  • Michael Dotsey & Margarida Duarte, 2009. "How Important is the Currency Denomination of Exports in Open-Economy Models?," Working Papers tecipa-383, University of Toronto, Department of Economics.
  • Handle: RePEc:tor:tecipa:tecipa-383
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    References listed on IDEAS

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    Cited by:

    1. Michael Dotsey & Margarida Duarte, 2017. "How Important is the Currency Denomination of Exports in Open Economy Models?," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 23, pages 1-18, January.

    More about this item

    Keywords

    local currency pricing; producer currency pricing; international relative prices; exchange rates; nontraded goods; distribution services;

    JEL classification:

    • F3 - International Economics - - International Finance
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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