Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/60663
Authors: 
Hellerstein, Rebecca
Villas-Boas, Sofia Berto
Year of Publication: 
2006
Series/Report no.: 
Staff Report, Federal Reserve Bank of New York 251
Abstract: 
A large share of international trade occurs through intrafirm transactions. We show that this common cross-border organization of the firm has implications for the welldocumented incomplete transmission of shocks across such borders. We present new evidence of an inverse relationship between a firm’s outsourcing of inputs and its rate of exchange rate pass-through. We then develop a structural econometric model with final assemblers and upstream parts suppliers to quantify how firms’ organization of their activities across national borders affects their pass-through behavior.
Subjects: 
exchange rate pass-through, intrafirm trade, outsourcing, vertical contracts
JEL: 
F14
F3
F4
Document Type: 
Working Paper

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