From Dominant to Producer Currency Pricing: Dynamics of Chilean Exports

Jose De Gregorio, Pablo Garcia, Emiliano Luttini and Marco Rojas

Working Papers from University of Chile, Department of Economics

Abstract: We revisit a central question for international macroeconomics: the response of export prices and quantities to movements in the exchange rate (ER). We use granular export data for Chile and study how the effects of ER movements vary over time with the currency of invoicing and the destination of exports. For prices, we find that the short-run effects of bilateral ER movements vanish when controlling for U.S. dollar ER, which supports the dominant currency paradigm. However, over longer horizons a more significant role is played by bilateral ER movements, lending support instead to producer currency pricing. These dynamics do not depend on the invoicing currency. The results we find for quantities support the view that bilateral exchange rate movements contribute to macroeconomic adjustment through export volumes.

Pages: 40 pages
Date: 2023-08
New Economics Papers: this item is included in nep-int, nep-mon and nep-opm
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Related works:
Journal Article: From dominant to producer currency pricing: Dynamics of Chilean exports (2024)
Working Paper: From Dominant to Producer Currency Pricing: Dynamics of Chilean Exports (2024)
Chapter: From Dominant to Producer Currency Pricing: Dynamics of Chilean Exports (2023)
Working Paper: From Dominant to Producer Currency Pricing: Dynamics of Chilean Exports (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:udc:wpaper:wp543

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