Arbeitspapier

Transmission of nominal exchange rate changes to export prices and trade flows and implications for exchange rate policy

We discuss how the welfare ranking of fixed and flexible exchange rate regimes in a New Open Economy Macroeconomics model depends on the interplay between the degree of exchange rate pass-through and the elasticity of substitution between home and foreign goods. We identify combinations of these two parameters for which flexible and for which fixed exchange rates are superior with respect to welfare as measured by a representative household's utility level. We estimate the two parameters for six non-EMU European countries (Czech Republic, Hungary, Poland, Slovakia, Sweden, United Kingdom) using a heterogeneous dynamic panel approach.

ISBN
978-3-86558-546-2
Language
Englisch

Bibliographic citation
Series: Discussion Paper Series 1 ; No. 2009,21

Classification
Wirtschaft
Open Economy Macroeconomics
Foreign Exchange
Empirical Studies of Trade
Subject
Elasticity of substitution between home and foreign goods
exchange rate pass-through
exchange rate regime choice
expenditure switching effect
heterogeneous dynamic panel
New Open Economy Macroeconomics
Exchange Rate Pass-Through
Handelbares Gut
Nicht-handelbares Gut
Substitutionselastizität
Wechselkosten
Wechselkurssystem
Wechselkurspolitik
Neue Makroökonomik offener Volkswirtschaften
Wohlfahrtseffekt
Tschechische Republik
Ungarn
Polen
Slowakei
Schweden
Großbritannien

Event
Geistige Schöpfung
(who)
Hoffmann, Mathias
Holtemöller, Oliver
Event
Veröffentlichung
(who)
Deutsche Bundesbank
(where)
Frankfurt a. M.
(when)
2009

Handle
Last update
10.03.2025, 11:44 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Hoffmann, Mathias
  • Holtemöller, Oliver
  • Deutsche Bundesbank

Time of origin

  • 2009

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