A Structural Approach to Identifying the Sources of Local-Currency Price Stability
---- Acknowledgements ----
We thank the editor, Enrique Sentana, and three anonymous referees for valuable comments and suggestions. We are grateful to Charles Engel for very useful conversations at an early stage of this project and have also benefited from the comments of seminar participants at Harvard, NYU, Princeton,Yale, the University of Minnesota, the Society for Economic Dynamics, the "Microeconomic Sources of Real Exchange-Rate Behavior" conference at Carnegie Mellon University, September 16-17, 2005, the "Firms' Price Choices: Exchanging Insights between Industrial Organization, Marketing Science and Macroeconomics" conference at the University of Chicago on December 15, 2006, and the International Finance and Macroeconomics meeting of the NBER Summer Institute in 2007. This paper was prepared while Goldberg was visiting the Federal Reserve Bank of New York, which she thanks for hospitality and support. The responsibility for any errors is of course our own. The views expressed in this paper are those of the authors, and do not necessarily reflect the position of the Federal Reserve Bank of New York, the Federal Reserve System, or the National Bureau of Economic Research.