Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/257056 
Year of Publication: 
2020
Citation: 
[Journal:] Economies [ISSN:] 2227-7099 [Volume:] 8 [Issue:] 1 [Article No.:] 6 [Publisher:] MDPI [Place:] Basel [Year:] 2020 [Pages:] 1-26
Publisher: 
MDPI, Basel
Abstract: 
This paper studies the role of the exchange rate regime for trade of new products. It first provides VAR evidence that a rise in external productivity shifts trade away from new products and more so in fixed regimes. Then, it presents a model with firm dynamics in line with this evidence. We argue that exchange rate policy can affect firms' entry decisions with consequences for the competitiveness of a country's exports well beyond the short run. In our setup, fixed exchange rates can foster the competitiveness of firms that trade new products, while flexible rates favor firms that produce mature products.
Subjects: 
comparative advantage
dsge model
exchange rate policy
firm entry
international business cycle
panel var
trade margins
JEL: 
E31
E32
E52
F10
F44
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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