Exchange Rate Policy and Firm Heterogeneity

Masashige Hamano, Francesco Pappadà*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


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.

Original languageEnglish
JournalIMF Economic Review
Publication statusAccepted/In press - 2022

ASJC Scopus subject areas

  • Business, Management and Accounting(all)
  • Economics, Econometrics and Finance(all)


Dive into the research topics of 'Exchange Rate Policy and Firm Heterogeneity'. Together they form a unique fingerprint.

Cite this