Extensive and intensive margins and the choice of exchange rate regimes

Masashige Hamano and Pierre Picard

DEM Discussion Paper Series from Department of Economics at the University of Luxembourg

Abstract: This paper studies how the choice of fixed or flexible exchange rate regimes is affected by the existence of intensive and extensive margins. We study two models where firms enter during or before each period of production. We show how the the choice of those regimes depend on the level and the volatily of the intensive and extensive margins as well as on the congruence between consumers' preferences and the supply and diversity of products. We show that fixed exchange rate regimes are preferred for high enough labor supply elasticities. Fixed exchange rate regimes are unambigously better when entry occurs at the same time as production in each period. Fixed exchange rate regimes are less attractive in the presence of production lags and higher love of product diversity.

Keywords: firm entry; product diversity; exchange rate system (search for similar items in EconPapers)
JEL-codes: E22 E52 L16 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://hdl.handle.net/10993/25338 (application/pdf)

Related works:
Journal Article: Extensive and intensive margins and exchange rate regimes (2017)
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:luc:wpaper:13-18

Access Statistics for this paper

More papers in DEM Discussion Paper Series from Department of Economics at the University of Luxembourg Contact information at EDIRC.
Bibliographic data for series maintained by Marina Legrand ().