We match Big Mac prices with prices of its ingredients as a unique prism to study real exchange rates (RERs). This approach has several advantages. First, the levels of the Big Mac RER can be measured meaningfully. Second, as the exact composition of a Big Mac is known, the contributions of its...

This paper studies the impact of exchange rate fluctuations on export product quality. Existing studies stress the link between home country depreciation and increased access to exports via a relative price effect. Our focus in this study is on the complementary effect of an import currency...

We suggest it may be quot;too easyquot; to attribute real exchange rate movements to law of one price deviations. We show that it is immaterial whether one uses seemingly traded goods, nontraded goods, or even just a single, unimportant consumer good, say beer. The ease of attributing the...

It has been suggested that recent findings of a decline in aggregate exchange rate pass-through are due to changes in demand elasticities within the U.S., or to changes in competitive (supply) conditions in for those imports. An alternate explanation is that the commodity composition of U.S....

This paper studies the effects of exchange rate uncertainty on prices in an intertemporal context. That is, we focus on the trade-offs between current and expected future volatility. We show that uncertainty matters even to risk neutral firms due to its effects on bid/ask spreads in foreign...

This paper points out an important difference between the effects of anticipated future exchange rate shocks on domestic and import prices when reputation effects exist. The distinction is relevant to discussions of the temporal stability of pass-through