Pricing-to-Market and Exchange Rate Dynamics: A Primer

Carlo Frenquelli ()
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Carlo Frenquelli: Università degli Studi di Macerata

Rivista di Politica Economica, 2006, vol. 96, issue 6, 105-143

Abstract: This paper provides a graphical exposition for understanding Pricing-to-Market (PTM) from both the micro and macroeconomic points of view. In particular, the paper focuses on the microeconomic conditions necessary for firms to apply PTM, and on how monetary policy transmission mechanisms change when the economy is characterized by PTM, with special attention to its impact on exchange rates and other real variables. Finally, the paper attempts to determine whether, in presence of PTM, monetary policy is a beggar-thy-neighbor or prosper-thy-neighbor instrument.

JEL-codes: D21 D42 E52 F41 F42 (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:rpo:ripoec:v:96:y:2006:i:6:p:105-143

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