From Dominant to Producer Currency Pricing: Dynamics of Chilean Exports

José De Gregorio, Pablo Garcia Silva, Emiliano Luttini and Marco Rojas

Working Papers Central Bank of Chile from Central Bank of Chile

Abstract: We revisit a central question for international macroeconomics: The response of export prices and quantities to movements in the exchange rate (ER). We use a comprehensive dataset for Chile and study how the effects vary over time with the currency of invoicing and the destination of exports. For prices, we find that the short-run effects of bilateral ER movements vanish when we control for U.S. dollar ER, which supports the dominant currency paradigm. The longer the horizon, the larger the role is played by bilateral ER movements, which lends support to producer currency pricing. The dynamics do not depend on the invoicing currency. We find consistent results for quantities, supporting the view that bilateral exchange rate movements contribute to macroeconomic adjustment through exports. We also find that U.S. dollar fluctuations, holding bilateral exchange rates constant, show results suggestive of relevant supply and demand effects.

Date: 2023-01
New Economics Papers: this item is included in nep-int, nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.bcentral.cl/documents/33528/133326/DTBC_970.pdf (application/pdf)

Related works:
Journal Article: From dominant to producer currency pricing: Dynamics of Chilean exports (2024)
Working Paper: From Dominant to Producer Currency Pricing: Dynamics of Chilean Exports (2024)
Chapter: From Dominant to Producer Currency Pricing: Dynamics of Chilean Exports (2023)
Working Paper: From Dominant to Producer Currency Pricing: Dynamics of Chilean Exports (2023)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:chb:bcchwp:970

Access Statistics for this paper

More papers in Working Papers Central Bank of Chile from Central Bank of Chile Contact information at EDIRC.
Bibliographic data for series maintained by Alvaro Castillo ().