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Journal articles IMF Economic Review Year : 2023

Exchange Rate Policy and Firm Heterogeneity

Abstract

This paper examines the exchange rate policy in a tractable framework with heterogeneous firms, incomplete financial markets and nominal rigidities. External demand shocks generate exchange rate movements leading to uncertainty in the labor demand of exporter firms. When exporter firms are homogeneous in terms of productivity, a monetary policy response to external demand shocks stabilizes the export market and improves welfare, thus providing a rationale for managed exchange rate policies.
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halshs-04346913, version 1 (15-12-2023)

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Masashige Hamano, Francesco Pappadà. Exchange Rate Policy and Firm Heterogeneity. IMF Economic Review, 2023, 71 (3), pp.759-790. ⟨10.1057/s41308-022-00188-2⟩. ⟨halshs-04346913⟩
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Last update date on 5/19/24
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