Autore
Ascione, Aurora

Titolo
Non-Price Competition and Exchange Rate Pass-Through
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 2007 - Fascicolo: 54 - Pagina iniziale: 1 - Pagina finale: 18

A substantial body of empirical works document that exchange rate pass-through to con- sumer prices is incomplete. This evidence has cast doubts on the ability of flexible exchange rates to generate expenditure switching. In a dynamic stochastic discrete-time duopoly game, non-price competition among firms endogenously originates a degree of exchange rate pass-through close to zero together with an expenditure switching effect stronger than in the standard models.




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