NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

International Prices and Exchange Rates

Ariel Burstein, Gita Gopinath

NBER Working Paper No. 18829
Issued in February 2013
NBER Program(s):   EFG   IFM   ITI   ME

We survey the recent empirical and theoretical developments in the literature on the relation between prices and exchange rates. After updating some of the major findings in the empirical literature we present a simple framework to interpret this evidence. We review theoretical models that generate insensitivity of prices to exchange rate changes through variable markups, both under flexible prices and nominal rigidities, first in partial equilibrium and then in general equilibrium.

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Document Object Identifier (DOI): 10.3386/w18829

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