Exchange Rate Fluctuations, Pass-Through, and Market Share
When the exchange rate fluctuates and the market exhibits hysteresis, planning horizons of domestic and foreign competitors will matter in determining pass-through as well as relative market shares of these firms. Using the Cournot duopoly model, it is shown that if the foreign exporter is a long-te...
Corporate Author: | |
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Format: | eBook |
Language: | English |
Published: |
Washington, D.C.
International Monetary Fund
1989
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Series: | IMF Working Papers
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Subjects: | |
Online Access: | |
Collection: | International Monetary Fund - Collection details see MPG.ReNa |
Summary: | When the exchange rate fluctuates and the market exhibits hysteresis, planning horizons of domestic and foreign competitors will matter in determining pass-through as well as relative market shares of these firms. Using the Cournot duopoly model, it is shown that if the foreign exporter is a long-term maximizer relative to the domestic firm, pass-through will be lower and average export penetration higher than otherwise |
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Physical Description: | 24 pages |
ISBN: | 9781451961393 |