Understanding Movements in Aggregate and Product-Level Real-Exchange Rates ∗

@inproceedings{Burstein2008UnderstandingMI,
  title={Understanding Movements in Aggregate and Product-Level Real-Exchange Rates ∗},
  author={Ariel Burstein and Nir Jaimovich},
  year={2008}
}
We provide new evidence on the importance of pricing-to-market in aggregate and product-level real exchange rate movements, using wholesale prices of consumer goods sold in multiple locations in Canada and the United States but produced in a common location. While movements in aggregate RERs for these goods closely track nominal exchange rates, product-level RERs across countries are four times as volatile as NERs, suggesting a limited role for sticky prices in accounting for pricing-to-market… CONTINUE READING
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