The real exchange rate is said to be the single most important price in an economy. While we used to think that we knew what explained its movements (e.g., the Balassa-Samuelson effect), the recent much-cited result by Engel (1999) proposes a serious reinterpretation – i.e., nearly 100% of the...

This paper exploits a three-dimensional panel data set of prices on 27 traded goods, over 88 quarters, across 96 cities in the U.S. and Japan. We present evidence that the distribution of intra-national real exchange rates is substantially less volatile and on average closer to zero, than the...

The authors exploit three-dimensional panel data on prices for twenty seven traded goods, over eighty eight quarters, across ninety six cities in Japan, and the United States, to answer several questions: 1) Does the average exchange rate between countries stray further from zero, than that...

A rapidly expanding literature studies the effect of currency union and other exchange rate arrangements on goods market integration. All existing studies employ a methodology based on observed volumes of trade. However, from a theoretical point of view the connection between market integration...

This paper studies the effect of instrumental and institutional stabilization of exchange rate volatility on the integration of goods markets. Rather than using data on volume of trade, this paper employs a 3-dimensional panel of prices of 95 very disaggregated goods (e.g., light bulbs) in 83...

The paper studies export pricing to market (PTM) in a "small-country" context using a panel of disaggregated exports from Hong Kong since 1992. Conventional wisdom is that PTM is commonplace-except for US exports. This study provides a benchmark by which to interpret the puzzling behavior of US...

This study examines exchange rate pass-through in a 'small country' context. The study uses a panel of disaggregated exports from Hong Kong to its major flexible exchange rate destinations since 1992. Most existing evidence on pass-through is taken from G7 countries and finds that export prices...

This paper presents estimates of exchange rate pass-through derived from a panel of very disaggregated import unit-values to Hong Kong. The estimation approach builds on that utilized by Knetter (1989, 1993) to study export pricing and pricing to market. The three-dimensional data set examined...

This study estimates pass-through for South Africa using samples of final goods and services, and homogenous imports. Estimated pass-through to consumer goods prices is low, roughly 16 per cent in the two years following an exchange rate change; surprisingly, it is somewhat higher for services....