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Nontraded goods, market segmentation, and exchange rates

Michael Dotsey and Margarida Duarte

Journal of Monetary Economics, 2008, vol. 55, issue 6, 1129-1142

Abstract: Empirical evidence suggests that movements in international relative prices are large and persistent. Nontraded goods, both in the form of final consumption goods and as an input into the production of final tradable goods, are an important aspect driving international relative price movements. In this paper we show that nontraded goods play an important role in the context of an otherwise standard open-economy macromodel. Our quantitative study with nontraded goods generates implications along several dimensions that are more closely in line with the data relative to the model that abstracts from nontraded goods.

Keywords: Exchange; rates; Nontraded; goods; Distribution; services; Incomplete; asset; markets (search for similar items in EconPapers)
Date: 2008
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Citations: View citations in EconPapers (39)

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Related works:
Working Paper: Nontraded goods, market segmentation, and exchange rates (2006) Downloads
Working Paper: Nontraded goods, market segmentation, and exchange rates (2006) Downloads
Working Paper: Nontraded Goods, Market Segmentation, and Exchange Rates (2006) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:moneco:v:55:y:2008:i:6:p:1129-1142

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