Author: Mr.Rudolfs Bems
Publisher: International Monetary Fund
Published: 2015-09-08
Total Pages: 70
ISBN-13: 1513538470
DOWNLOAD EBOOKWe examine the role of cross-border input linkages in governing how international relative price changes influence demand for domestic value added. We define a novel value-added real effective exchange rate (REER), which aggregates bilateral value-added price changes, and link this REER to demand for value added. Input linkages enable countries to gain competitiveness following depreciations by supply chain partners, and hence counterbalance beggar-thy-neighbor effects. Cross-country differences in input linkages also imply that the elasticity of demand for value added is country specific. Using global input-output data, we demonstrate these conceptual insights are quantitatively important and compute historical value-added REERs.
Book Synopsis Demand for Value Added and Value-Added Exchange Rates by : Mr.Rudolfs Bems
Download or read book Demand for Value Added and Value-Added Exchange Rates written by Mr.Rudolfs Bems and published by International Monetary Fund. This book was released on 2015-09-08 with total page 70 pages. Available in PDF, EPUB and Kindle. Book excerpt: We examine the role of cross-border input linkages in governing how international relative price changes influence demand for domestic value added. We define a novel value-added real effective exchange rate (REER), which aggregates bilateral value-added price changes, and link this REER to demand for value added. Input linkages enable countries to gain competitiveness following depreciations by supply chain partners, and hence counterbalance beggar-thy-neighbor effects. Cross-country differences in input linkages also imply that the elasticity of demand for value added is country specific. Using global input-output data, we demonstrate these conceptual insights are quantitatively important and compute historical value-added REERs.