World global dating network

Conținutul

    world global dating network

    Details Abstract This paper draws a causal link between the rise of global value chain participation and the decline of exchange rate pass-through to import prices over the last decades.

    We first present a structural two-country model in order to illustrate how participation in global value chains can impact exchange rate pass-through to import prices.

    world global dating network

    In the model, the sensitivity of an economy's domestic-currency production costs to exchange rate changes rises as it participates more in global value chains by importing a larger share of its world global dating network inputs. The increased sensitivity of the economy's domestic-currency production costs to exchange rate changes translates into a higher sensitivity of its domestic-currency export prices.

    The latter implies a reduction of the sensitivity of the economy's foreign-currency export prices — i.

    world global dating network

    Hence, an increase in the economy's global value chain participation implies a fall in its trading partner's exchange rate pass-through to import prices. We then provide empirical evidence in a cross-country panel dataset for the time period from to that is consistent with the mechanisms spelled out in the structural model.

    world global dating network

    In particular, the data suggest that exchange rate pass-though to export prices is higher in economies which participate more in global value chains, and that exchange rate pass-though to import prices is lower in economies whose trading partners participate more in global value chains.