EconPapers    
Economics at your fingertips  
 

International Financial Market Integration, Asset Compositions, and the Falling Exchange Rate Pass-Through

Zeno Enders, Almira Buzaushina and Mathias Hoffmann ()

VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association

Abstract: This paper provides an explanation for the observed decline of the exchange rate pass-through into import prices by modeling the effects of financial market integration on the optimal choice of the pricing currency in the context of rigid nominal goods prices. Contrary to previous literature, we take the interdependence of this choice with the optimal portfolio choice of internationally traded financial assets explicitly into account. In particular, price setters move towards more localcurrency pricing and portfolios include more foreign debt assets following increased financial integration. Both predictions are in line with novel empirical evidence.

JEL-codes: F31 F36 F41 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-mon and nep-opm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.econstor.eu/bitstream/10419/145494/1/VfS_2016_pid_6285.pdf (application/pdf)

Related works:
Journal Article: International financial market integration, asset compositions, and the falling exchange rate pass-through (2018) Downloads
Working Paper: International Financial Market Integration, Asset Compositions, and the Falling Exchange Rate Pass-Through (2017) Downloads
Working Paper: International financial market integration, asset compositions, and the falling exchange rate pass-through (2015) Downloads
Working Paper: International Financial Market Integration, Asset Compositions and the Falling Exchange Rate Pass-Through (2014) Downloads
Working Paper: International Financial Market Integration, Asset Compositions and the Falling Exchange Rate Pass-Through (2014) Downloads
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:zbw:vfsc16:145494

Access Statistics for this paper

More papers in VfS Annual Conference 2016 (Augsburg): Demographic Change from Verein für Socialpolitik / German Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by ZBW - Leibniz Information Centre for Economics ().

 
Page updated 2024-04-09
Handle: RePEc:zbw:vfsc16:145494