We exploit French customs’ firm-level data to study how exporters pass a change in the VAT rate of one importing country through their prices. Looking at this reaction is of interest beyond a mere fiscal incidence analysis: VAT shocks provide instruments to identifying the extent of mark-up...

We investigate the impact on profit margins of exchange rate fluctuations in order to examine optimal pricing policy by source countries in the UK car market. We first estimate a nested logit demand model of new cars to calculate model-specific profit margins. Next we use these estimates to...

The present paper examines export and import pricing behavior following exchange rate changes in small, open economies. Using a monopolistic model, this study reveals that export and import prices should change but not in proportion to exchange rate movements. The policy implication of the...