Cover IMF Working Papers
Exchange Rate Fluctuations, Pass-Through, and Market Share
Author:
International Monetary Fund
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Series:
IMF Working Papers
Volume/Issue:
Volume 1989: Issue 067
Language:
English
Publication Date:
01 Jan 1989
DOI:
https://doi.org/10.5089/9781451961393.001
ISBN:
9781451961393
ISSN:
1018-5941
Pages:
24
Keywords:
WP; firm; planning horizon; export firm; Japanese firm; upstart firm; rival firm's output; Exchange rates; Exports; Export prices; Exchange rate arrangements
Legal-disclaimer:
IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.
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When the exchange rate fluctuates and the market exhibits hysteresis, planning horizons of domestic and foreign competitors will matter in determining pass-through as well as relative market shares of these firms. Using the Cournot duopoly model, it is shown that if the foreign exporter is a long-term maximizer relative to the domestic firm, pass-through will be lower and average export penetration higher than otherwise.
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Cover IMF Working Papers
IMF Working Papers
ISSN:
1018-5941
Publisher:
International Monetary Fund
Volume 1989: Issue 067