A new technique for estimating purchasing power parity (PPP) exchange rates that makes use of price pressure exerted by exchange rate deviation is presented. The methodology consists of two equations for relative prices and relative costs, which are derived from a structural model, and offers a...

When the exchange rate fluctuates and the market exhibits hysteresis, planning horizons of domestic and foreign competitors will matter in the determination of pass-through as well as relative market shares of these firms. Using the Cournot duopoly model, it is shown that if the foreign exporter...

The pricing behavior of U.S. and Japanese manufacturers is compared by using domestic and export price data and a framework of markup over cost. Major export industries in Japan have higher productivity growth and lower pass-through coefficients than American exporters, who tend to price to...