The choice of unit of account in longer term unhedged contracts involving parties from multiple countries influences the size and distribution of currency risk. Contracts currently predominantly use the same unit as means of payment and as unit of account. The relative performance of such single...

The authors review recent international price comparisons to examine the veracity of claims about “rip-off Britainâ€. They reach three conclusions. First, methodologically, the data requirements for a meaningful price comparison are very demanding and most of the evidence does not meet...

Recent evidence suggests that while real exchange rates exhibit mean reversion, the reversion only sets in once a minimum "threshold" distance from the mean has been exceeded. The non-linearity has generally been attributed to costly arbitrage, which requires a minimum divergence before the...

Lance Taylor is widely considered to be one of the pre-eminent development economists in the world and is known for his work on development planning, macroeconomics of development, stabilization policy, and the global economy. He has also been the major force behind structuralist economics,...

A large body of literature finds that exporters do not pass nominal exchange rate movements fully through to destination market prices over short time horizons. This imperfect passthrough has been widely attributed to strategic “pricing-to-market”, whereby exporters deliberately accept...