000			01694nam a22001577a 4500
999			_c514200 _d514200
008			201014b ||||| |||| 00| 0 eng d
100			_aGopinath, Gita et al _918642
245			_aDominant currency paradigm
260			_aThe American Economic Review
300			_a110(3), Mar, 2020: p.677-719
520			_aWe propose a "dominant currency paradigm" with three key features: dominant currency pricing, pricing complementarities, and imported inputs in production. We test this paradigm using a new dataset of bilateral price and volume indices for more than 2,500 country pairs that covers 91 percent of world trade, as well as detailed firm-product-country data for Colombian exports and imports. In strong support of the paradigm we find that (i) non commodities terms-of-trade are uncorrelated with exchange rates; (ii) the dollar exchange rate quantitatively dominates the bilateral exchange rate in price pass-through and trade elasticity regressions, and this effect is increasing in the share of imports invoiced in dollars; (iii) US import volumes are significantly less sensitive to bilateral exchange rates, compared to other countries' imports; (iv) a 1 percent US dollar appreciation against all other currencies predicts a 0.6 percent decline within a year in the volume of total trade between countries in the rest of the world, controlling for the global business cycle. We characterize the transmission of, and spillovers from, monetary policy shocks in this environment. – Reproduced
650			_aEmpirical studies of trade, Foreign exchange, International business cycles _918603
773			_aThe American Economic Review
906			_aMONETARY POLICY
942			_cAR