Exchange Rate Policy and Firm Heterogeneity

Article dans une revue: 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.

Auteur(s)

Masashige Hamano, Francesco Pappadà

Revue
  • IMF Economic Review
Date de publication
  • 2023
Mots-clés JEL
E40 F32 F41
Pages
  • 759-790
Version
  • 1
Volume
  • 71