Macroeconomic Volatility and Exchange Rate Pass-through under Internationalized Production - Centre d'Étude des Politiques Économiques Accéder directement au contenu
Autre Publication Scientifique Année : 2009

Macroeconomic Volatility and Exchange Rate Pass-through under Internationalized Production

Résumé

This paper shows that internationalized production, modelled as trade in intermediate goods, challenges the standard result according to which exchange rate volatility insulates small open economies from external shocks. Movements of relative prices affect the economy through an additional channel, denoted as the cost channel. We show that this channel also acts as an automatic stabilizer and that macroeconomic volatility is dramatically reduced when trade in intermediate goods is taken into account. Finally, trade in intermediate goods affects the exchange rate pass-through to consumption prices and may contribute explaining the puzzle described by McCallum & Nelson (2000).
Fichier principal
Vignette du fichier
0915.pdf (303.42 Ko) Télécharger le fichier
Origine : Fichiers produits par l'(les) auteur(s)

Dates et versions

halshs-00407665 , version 1 (27-07-2009)

Identifiants

  • HAL Id : halshs-00407665 , version 1

Citer

Aurélien Eyquem, Gunes Kamber. Macroeconomic Volatility and Exchange Rate Pass-through under Internationalized Production. 2009. ⟨halshs-00407665⟩
82 Consultations
59 Téléchargements

Partager

Gmail Facebook X LinkedIn More