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Working paper 383
Michael Dotsey and Margarida Duarte, "How Important is the Currency Denomination of Exports in Open-Economy Models?", 2009-11-20
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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

Last updated on July 12, 2012