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Economic Consequences of Dominant Currencies

Paper Session

Friday, Jan. 4, 2019 10:15 AM - 12:15 PM

Atlanta Marriott Marquis, International 5
Hosted By: American Economic Association
  • Chair: Gita Gopinath, Harvard University

The Rise of the Dollar and Fall of the Euro as International Currencies

Matteo Maggiori
,
Harvard University
Brent Neiman
,
University of Chicago
Jesse Schreger
,
Columbia University

Abstract

Explore the financial consequences of being an international currency

Dollar Invoicing and the Heterogeneity of Exchange Rate Pass-Through

Emine Boz
,
International Monetary Fund
Gita Gopinath
,
Harvard University
Mikkel Plagborg-Moller
,
Princeton University

Abstract

We show empirically that the variation across country pairs in exchange rate pass-through and trade elasticity is meaningfully explained by the dollar's dominance as invoicing currency. We use a hierarchical Bayesian approach to directly and flexibly model pass-through heterogeneity conditional on the invoicing share. We estimate that the importer's country-level dollar invoicing share explains 15% of the overall variance across trading pairs in dollar exchange rate pass-through into bilateral prices.

Exports and Invoicing: Evidence from the 2015 Swiss CHF Appreciation

Raphael Auer
,
Bank for International Settlements
Ariel Burstein
,
University of California-Los Angeles
Sarah Lein
,
University of Basel

Abstract

Explores the differential cross-sectional response of border prices and export values tied to currency of invoicing following the Swiss CHF appreciation in 2015.
Discussant(s)
Hyun Song Shin
,
Bank for International Settlements
Michael Devereux
,
University of British Columbia
Oleg Itskhoki
,
Princeton University
JEL Classifications
  • F0 - General