title: International Financial Market Integration, Asset Compositions  and the Falling Exchange Rate Pass-Through
creator: Buzaushina, Almira 
creator: Enders, Zeno
creator: Hoffmann, Mathias 
subject: ddc-330
subject: 330 Economics
description: This paper provides an explanation for the observed decline of the exchange rate pass-through into import prices by modeling the effects of financial market integration on the optimal choice of the pricing currency in the context of rigid nominal goods prices. Contrary to previous literature,  the interdependence of this choice with the optimal portfolio choice of internationally traded financial assets is explicitly taken into account. In particular, price setters move towards more local-currency pricing while the debt portfolio includes more foreign assets following increased financial integration. Both predictions are in line with novel empirical evidence.
date: 2014-06
type: Working paper
type: info:eu-repo/semantics/workingPaper
type: NonPeerReviewed
format: application/pdf
identifier: https://archiv.ub.uni-heidelberg.de/volltextserverhttps://archiv.ub.uni-heidelberg.de/volltextserver/17061/1/Buzaushina_Enders_Hoffmann_2014_dp569.pdf
identifier: DOI:10.11588/heidok.00017061
identifier: urn:nbn:de:bsz:16-heidok-170618
identifier:   Buzaushina, Almira  ; Enders, Zeno ; Hoffmann, Mathias   (2014) International Financial Market Integration, Asset Compositions and the Falling Exchange Rate Pass-Through.  [Working paper]     
relation: https://archiv.ub.uni-heidelberg.de/volltextserver/17061/
rights: info:eu-repo/semantics/openAccess
rights: http://archiv.ub.uni-heidelberg.de/volltextserver/help/license_urhg.html
language: eng