La-Pleiade and Exchange-Rate Pass-Through
International Journal of Industrial Organization, 1995, 13, 2, 195-211
BANIAK, Andrzej, PHLIPS, Louis, La-Pleiade and Exchange-Rate Pass-Through, International Journal of Industrial Organization, 1995, 13, 2, 195-211 - http://hdl.handle.net/1814/16909
Retrieved from Cadmus, EUI Research Repository
We examine the effects of a change in the exchange rate on sales and prices in the framework of a two-country, two-commodity duopoly model with joint production. We distinguish two kinds of reaction. When the firm located in the country whose currency depreciates (appreciates) increases (decreases) sales in both countries, we call it the 'firm-specific' effect. If all sales in the country which appreciates (depreciates) its currency increase (decrease), we call it the 'country-specific' effect. Strategic substitutability, economies of joint production and/or economies of scale lead to the firm-specific effect. Strategic complementarity, diseconomies of joint production and/or diseconomies of scale lead to the country-specific effect.
Cadmus permanent link: http://hdl.handle.net/1814/16909
Full-text via DOI: 10.1016/0167-7187(94)00452-8
Earlier different version: http://hdl.handle.net/1814/500
Version: The article is a published version of EUI ECO WP; 1994/20
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