Crucini, Mario J.; Shintani, Mototsugu; Tsuruga, Takayuki - Vanderbilt University Department of Economics - 2010
We introduce the real exchange rate volatility curve as a useful device to understand the relationship between price stickiness and the fluctuations in Law of One Price deviations. In the presence of both nominal and real shocks, the theory predicts that the real exchange rate volatility curve...