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.
Keywords: local currency pricing; producer currency pricing; international relative prices; exchange rates; nontraded goods; distribution services
JEL Classification: F3; F41