International Prices and Exchange Rates

Ariel Burstein and Gita Gopinath

Chapter Chapter 7 in Handbook of International Economics, 2014, vol. 4, pp 391-451 from Elsevier

Abstract: We survey the recent empirical and theoretical developments in the literature on the relation between prices and exchange rates. After updating some of the major findings in the empirical literature, we present a simple framework to interpret this evidence. We review theoretical models that generate insensitivity of prices to exchange rate changes through variable markups, both under flexible prices and nominal rigidities, first in partial equilibrium and then in general equilibrium.

Keywords: Real exchange rate; Nominal exchange rate; Border prices; Variable markups; Price rigidity; Pass-through; Tradeable goods (search for similar items in EconPapers)
JEL-codes: F15 F3 F4 (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (287)

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Working Paper: International Prices and Exchange Rates (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:intchp:4-391

DOI: 10.1016/B978-0-444-54314-1.00007-0

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