Extensive and intensive margins and exchange rate regimes

Masashige Hamano, Pierre M. Picard

    Research output: Contribution to journalArticle

    Abstract

    This paper studies the costs and benefits of fixed and flexible exchange rate regimes in the presence of endogenous intensive and extensive margins of trade. The net benefit depends on the levels and volatilities of those margins as well as on their correlation with consumers’ preferences. A fixed exchange rate regime is preferred for sufficiently high labour supply elasticities and lower love for product diversity. Delays between entry and production make fixed exchange rate regimes less attractive.

    Original languageEnglish
    Pages (from-to)804-837
    Number of pages34
    JournalCanadian Journal of Economics
    Volume50
    Issue number3
    DOIs
    Publication statusPublished - 2017 Aug 1

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    Extensive margin
    Fixed exchange rates
    Intensive margin
    Exchange rate regimes
    Margin
    Consumer preferences
    Labor supply elasticity
    Product diversity
    Flexible exchange rates
    Costs and benefits

    ASJC Scopus subject areas

    • Economics and Econometrics

    Cite this

    Extensive and intensive margins and exchange rate regimes. / Hamano, Masashige; Picard, Pierre M.

    In: Canadian Journal of Economics, Vol. 50, No. 3, 01.08.2017, p. 804-837.

    Research output: Contribution to journalArticle

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