[Publisher:] Institut für Weltwirtschaft (IfW) [Place:] Kiel [Year:] 1999
Kiel Working Paper 915
In this paper, an oligopolistic framework in which goods and market characteristics can be varied parametrically, is used to explain passthrough of prices as a reaction to exchange rate or cost changes. Price setting is compared between different markets, for the same product and between different producers in the same market. The aim of this paper is to account for these price differentials by analyzing the contributions of all relevant factors in order to explain differences across sectors.