We introduce elements of state-dependent pricing and strategic complementarity within an otherwise standard "New Open Economy Macroeconomics" model, and develop its implications for the dynamics of real and nominal economic activity. Under a traditional Producer-Currency-Pricing environment, our...

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.

With over 300 stores in 40 countries, IKEA is a major international presence in retail housewares and furnishings. IKEA publishes country-specific catalogs with local-currency prices guaranteed to hold for 1 year. This paper explores a new dataset of IKEA products and catalog prices covering six...

This paper presents a two-country DSGE model with state-dependent pricing as in Dotsey, King, and Wolman (1999) in which firms price-discriminate across countries by setting prices in local currency. In this model, a domestic monetary expansion has greater spillover effects to foreign prices and...

This paper presents a two-country DSGE model with state-dependent pricing as in Dotsey et al. (1999) in which firms discriminate across countries by setting prices in local currency. In this model, a domestic monetary expansion has greater spillover effects to foreign prices and foreign economic...

An important challenge for macroeconomics is to understand the reasons that retail prices change infrequently and the implications of this pricing behavior for economic welfare and allocative efficiency. This paper develops a menu cost model of pricing in which retail firms intermediate trade...

Investment-specific technological progress as reflected by the decline in the relative price of U.S. capital goods has substantially contributed to U.S. postwar growth. Imports of capital goods have represented an increasing share of U.S. equipment investment, and their price relative to U.S....

The global, national, regional and local factors that shape price-setting behavior are complex, even for a relatively simple product that's neither easily tradable nor wholly nontradable.

With over 300 stores in 40 countries, IKEA is a major international presence in retail housewares and furnishings. IKEA publishes country-specific catalogs with local-currency prices guaranteed to hold for 1 year. This paper explores a new dataset of IKEA products and catalog prices covering six...