Entry, multinational firms and exchange rate volatility

Arbeitspapier

Recent discussions of exchange rate determination have emphasized the possible role of foreign direct investment in influencing exchange rate behavior. Yet, there are few existing models of multinational enterprises (MNEs) and endogenous exchange rates. This paper demonstrates that the entry decisions of MNEs can influence the volatility of the real exchange rate in countries were there are significant costs involved in maintaining production facilities, even when prices are perfectly flexible. For empirically plausible parameters, MNE activity can make the exchange rate much more volatile than relative consumption.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 06-22

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Multiple or Simultaneous Equation Models: Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models ; Forecasting Models; Simulation Methods

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Russ, Katheryn ; Lubik, Thomas A.
• Ereignis: Veröffentlichung
• (wer): University of California, Department of Economics
• (wo): Davis, CA
• (wann): 2006

Weitere Informationen

• Handle: http://hdl.handle.net/10419/31335
• Letzte Aktualisierung: 10.03.2025, 11:44 MEZ