Industry Restructuring, Mark-ups, and Exchange Rate Pass-Through

Arbeitspapier

Consumer prices are not very responsive to movements in nominal exchange rates and their response has fallen in Canada since the mid 1980s. This paper explores two of the most likely explanations for this decline in exchange rate pass-through to consumer prices: (1) lower inflation and (2) restructuring in the retail sector. We believe that both explanations are important but our primary focus in this paper is on the second explanation. We discuss the restructuring that has occurred in Canadian retail and trends in mark-ups and concentration in that sector. We argue that to understand these trends, it is important to examine pass-through in industrial organization models with strategic elements. Finally, we present a series of such models and evaluate the effects of various forms of restructuring on mark-ups, concentration, and exchange rate pass-through.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Queen's Economics Department Working Paper ; No. 1120

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: General ; Economic Integration ; Foreign Exchange ; Open Economy Macroeconomics ; Industrial Organization and Macroeconomics: Industrial Structure and Structural Change; Industrial Price Indices
• Subject: Pass-Through ; Restructuring ; Strategic Pricing ; Mark-ups ; Exchange Rates ; Imperfect Competition ; Exchange Rate Pass-Through ; Verbraucherpreisindex ; Inflationsrate ; Einzelhandel ; Organisatorischer Wandel ; Kanada

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lapham, Beverly ; Leung, Danny
• Event: Veröffentlichung
• (who): Queen's University, Department of Economics
• (where): Kingston (Ontario)
• (when): 2006

Further information

• Handle: http://hdl.handle.net/10419/189396
• Last update: 10.03.2025, 11:43 AM CET