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Exchange Rate Pass-Through and the Welfare Effects of the Euro

Devereux, Michael B. - 1999

-rate volatility, much the way U.S. consumer prices already are. We show that this has profound consequences for both the volatility … and levels of macroeconomic aggregates in both the U.S. and Europe. We find that European welfare is enhanced, and, more … surprisingly U.S. shares in Europe's good fortune. Alternative assumptions about how pricing behavior will change lead to different …

Persistent link: https://www.econbiz.de/10012471402

Does "Aggregation Bias" Explain the PPP Puzzle?

Chen, Shiu-Sheng - 2004

Recently, Imbs et. al. (2002) have claimed that much of the purchasing power parity puzzle can be explained by aggregation bias'. This paper re-examines aggregation bias. First, it clarifies the meaning of aggregation bias and its applicability to the PPP puzzle. Second, the size of the bias' is...

Persistent link: https://www.econbiz.de/10012468389

The Responsiveness of Consumer Prices to Exchange Rates And the Implications for Exchange-Rate Policy : A Survey Of a Few Recent New Open-Economy

Engel, Charles - 2002

The traditional case for flexibility in nominal exchange rates assumes that there is nominal price stickiness that prevents relative prices from adjusting in response to real shocks. When prices are sticky in producers' currencies, nominal exchange rate changes can achieve the relative price...

Persistent link: https://www.econbiz.de/10012469990

The Distribution of Exchange Rates in the EMS

Engel, Charles - 1994

Exchange rates of currencies in the Exchange Rate Mechanism of the EMS are characterized by long periods of stability interrupted by periods of extreme volatility. The periods of volatility appear at times of realignments of the central parities and at times when the exchange rate is within the...

Persistent link: https://www.econbiz.de/10012474081