We show that, in general, consistent estimates of cost pass-through are not obtained from reduced-form regressions of price on cost. We derive a formal approximation for the bias that arises even under standard orthogonality conditions. We provide guidance on the conditions under which bias may...

This note studies exchange rate pass-through to the prices of domestically produced goods, exploring the firm-level pricing survey conducted by the Bank of Korea. The data reveal the imported inputs channel of, as well as nonlinear and asymmetric, exchange rate-pass-through.

We demonstrate that the European Monetary Union (EMU) increases cross-border depositing but not lending among EMU countries by 31%. While being a member of the European Union (EU) increases cross-border loans by 49%, cross-border deposit volumes are unaffected.

Using a unique data set from the Bank of Canada, this paper presents the frequency domain analysis of a causal relationship between the Canada/US dollar exchange rate movements and currency order flows. The evidence shows that the existence as well as the direction of causality depends on the...

We investigate whether global value chains have increased the sensitivity of Chinese trade to foreign income shocks. This may occur through either composition or supply chain effects. We find evidence for the former, but not the latter.

I provide new estimates of border frictions for 14 countries using local, national, and international Big Mac prices. I find that borders generally introduce only small price wedges, far smaller than those observed across New York City neighboring locations.

We compute the tradable and non-tradable input shares for consumption and investment from the latest release of OECD input–output tables. We document that input shares (the content of tradable and non-tradable goods per unit of final demand) differ substantially from final demand shares (the...

We exploit dynamic correlations to estimate determinants of output comovement between OECD countries. Trade intensity, financial integration, and specialization patterns have significantly different effects on comovements at different frequencies. This sheds more light on previous results based...

What are the gains from international trade? And how do immigrants influence this process? We consider the case of Canada, document its experience with import variety growth in the period from 1988 to 2007, and relate this variety growth to the process of immigration. We find that import...

This paper examines the synchronization of business cycles across the G7 countries during US recessions since the 1870s. Using a dynamic measure of correlations, results depend on the globalization period under consideration. During the 2007–2009 recession, business cycles co-movements...