NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Export Prices and Exchange Rates

Irving B. Kravis, Robert E. Lipsey, Eliot R. J. Kalter

NBER Working Paper No. 182
Issued in July 1977
NBER Program(s):   ME

The present paper is intended to make a modest contribution to an under-standing of one small but important link in this complicated chain of interacting factors. It is a link that has often been ignored because strong simplifying assumptions have until very recently usually been made about it. We refer to the relation of exchange rate changes, export prices, and domestic prices. During the last few years a number of attempts have been made to examine the extent to which exchange rate changes were "passed through"; that is, the extent to which a given depreciation in the U.S. dollar, for example, resulted in a corresponding decline in the price of U.S. exports in foreign currencies. However, the possibility that a change in the exchange rate might also alter the relationship between the export price and the domestic price of a given product, expressed in the same currency, has been almost completely ignored. The assumption made, implicitly by most past writers in the theory of international trade and more recently explicitly by advocates of the monetary approach to the balance of payments, has been that the "law of one price" applies to shipments destined for home markets and for foreign markets.

download in pdf format
   (400 K)

email paper

This paper is available as PDF (400 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w0182

Published: (Published as "Export Prices and the Transmission of Inflation") American Economic Review, Vol. 67, no. 1 (1977): 155-163.

Users who downloaded this paper also downloaded these:
Kravis and Lipsey w0176 Export and Domestic Prices Under Inflation and Exchange Rate Movements
Schembri Export Prices and Exchange Rates: An Industry Approach
Edwards Commodity Export Prices and the Real Exchange Rate in Developing Countries: Coffee in Colombia
Dornbusch w1769 Exchange Rates and Prices
Edwards w1570 Commodity Export Prices and the Real Exchange Rate in Developing Countries: Coffee in Colombia
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us