In this paper we investigate how firms adjust markups across products in response to fluctuations in the real exchange rate. In a theoretical framework, we show that firms increase their markup and producer prices following a real depreciation and that this increase is greater for products with...

This paper focuses on an unexamined area of trade, the behaviour of heterogeneous intermediate suppliers facing final producers of different ability and pursuing different strategies. We develop a theoretical model to analyse the choice of an intermediate supplier between selling to domestic...

In this paper we investigate how firms adjust markups across products in response to fluctuations in the real exchange rate. In a theoretical framework, we show that firms increase their markup and producer prices following a real depreciation and that this increase is greater for products with...