Giovanni, Claudio Bravo-Ortega AND Julian di - Econometric Society - 2004
This paper examines the impact of trade costs on real exchange rate volatil- ity. We model two channels endogenously in …), which endogenizes the size of the nontradable sector. The model shows that higher trade costs result in a larger nontradable … technological differences and trade costs. In this world, relative differences across countries is key. The model enables us to …