Why do large movements in exchange rates have small effects on international prices?
Amiti, Mary, Itskhoki, Oleg, Konings, Josef. Why is it that large movements in exchange rates have small effects on international prices? What does this mean for a crisis-stricken Eurozone? Using firm-level data, this column presents new research that investigates this exchange rate ‘disconnect’. Evidence suggests that the prices of the largest firms – with their disproportionately large […]