DOMINANT CURRENCIES: HOW FIRMS CHOOSE CURRENCY INVOICING AND WHY IT MATTERS*
| dc.contributor.author | Amiti, Mary | |
| dc.contributor.author | Itskhoki, Oleg | |
| dc.contributor.author | Konings, Jozef | |
| dc.date.accessioned | 2023-03-29T09:07:16Z | |
| dc.date.available | 2023-03-29T09:07:16Z | |
| dc.date.issued | 2022 | |
| dc.description.abstract | We analyze how firms choose the currency of invoicing and the implications of this choice for exchange rate pass-through into export prices and quantities. Using a new data set for Belgian firms, we find currency invoicing to be an active firm-level decision, shaped by the firm’s size, exposure to imported inputs, and the currency choices of its competitors. Our results show that a firm’s currency choice, in turn, has a direct causal effect on the exchange rate pass-through into prices and quantities. Moreover, the differential price response of similar firms that invoice in different currencies is large, persists beyond a one-year horizon, and gradually wanes in the long run. This results in allocative expenditure-switching effects on export quantities, which build up over time, suggesting a role for quantity adjustment frictions in addition to price stickiness. Our findings shed light on the mechanisms that make or break a dominant currency and the consequences it has for the international transmission of shocks. | en_US |
| dc.identifier.citation | Amiti, M., Itskhoki, O., & Konings, J. (2022). Dominant Currencies: How Firms Choose Currency Invoicing and Why it Matters. Quarterly Journal of Economics, 137(3), 1435–1493. https://doi.org/10.1093/qje/qjac004 | en_US |
| dc.identifier.uri | http://nur.nu.edu.kz/handle/123456789/7003 | |
| dc.language.iso | en | en_US |
| dc.publisher | The Quarterly Journal of Economics | en_US |
| dc.rights | Attribution-NonCommercial-ShareAlike 3.0 United States | * |
| dc.rights.uri | http://creativecommons.org/licenses/by-nc-sa/3.0/us/ | * |
| dc.subject | Type of access: Open Access | en_US |
| dc.subject | E31 - Price Level | en_US |
| dc.subject | Inflation | en_US |
| dc.subject | DeflationF31 | en_US |
| dc.subject | Foreign ExchangeF41 | en_US |
| dc.subject | Open Economy Macroeconomics | en_US |
| dc.title | DOMINANT CURRENCIES: HOW FIRMS CHOOSE CURRENCY INVOICING AND WHY IT MATTERS* | en_US |
| dc.type | Article | en_US |
| workflow.import.source | science |