Can producer currency pricing models generate volatile real exchange rates?

Laura Povoledo

Economics Letters, 2012, vol. 116, issue 3, 436-439

Abstract: If the elasticities of substitution between traded and nontraded and between Home and Foreign traded goods are sufficiently low, then the real exchange rate generated by a model with full producer currency pricing is as volatile as in the data.

Keywords: Real exchange rate volatility; Producer currency pricing; Elasticity of substitution; New open-economy macroeconomics (search for similar items in EconPapers)
JEL-codes: E32 F41 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:116:y:2012:i:3:p:436-439

DOI: 10.1016/j.econlet.2012.04.033

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