This paper examines the exchange rate policy in a tractable framework with heterogeneous firms, incomplete financial markets and nominal rigidities. External demand shocks generate exchange rate movements leading to uncertainty in the labor demand of exporter firms. When exporter firms are homogeneous in terms of productivity, a monetary policy response to external demand shocks stabilizes the export market and improves welfare, thus providing a rationale for managed exchange rate policies.
Exchange Rate Policy and Firm Heterogeneity
Pappada, Francesco
2023-01-01
Abstract
This paper examines the exchange rate policy in a tractable framework with heterogeneous firms, incomplete financial markets and nominal rigidities. External demand shocks generate exchange rate movements leading to uncertainty in the labor demand of exporter firms. When exporter firms are homogeneous in terms of productivity, a monetary policy response to external demand shocks stabilizes the export market and improves welfare, thus providing a rationale for managed exchange rate policies.
File in questo prodotto:
| File | Dimensione | Formato | |
|---|---|---|---|
|
IMF_ER_2023.pdf
non disponibili
Tipologia:
Versione dell'editore
Licenza:
Copyright dell'editore
Dimensione
2.05 MB
Formato
Adobe PDF
|
2.05 MB | Adobe PDF | Visualizza/Apri |
I documenti in ARCA sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.
