the relationship between invoicing currency choices and the response of import prices to exchange rate changes. We find … that for transactions invoiced in a vehicle currency, import prices are much more sensitive to changes in the vehicle … currencies. Our results help to explain the higher-than-expected pass-through into import prices during the Great Recession and …

macroeconometric models. As an application we consider UK entry to the euro. Entry involves a long-term commitment to restrict UK … nominal exchange rates and interest rates to be the same as those of the euro area. We derive conditional probability … distributions for the difference between the future realisations of variables of interest (e.g UK and euro area output and prices …

convergence of exchange rates to the euro and the subsequent anticipation for a lower currency risk, which diminishes the cost of …