Reference : Extensive and intensive margins and the choice of exchange rate regimes
E-prints/Working papers : Already available on another site
Business & economic sciences : Macroeconomics & monetary economics
http://hdl.handle.net/10993/25338
Extensive and intensive margins and the choice of exchange rate regimes
English
Picard, Pierre M mailto [University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) >]
Hamano, Masashige [Sophia University, Tokyo]
2013
26
No
[en] firm entry ; product diversity ; exchange rate system
[en] This paper studies how the choice of fixed or flexible exchange rate regimes is affected by the existence of intensive and extensive margins. We study two models where firms enter during or before each period of production. We show how the the choice of those regimes depend on the level and the volatily of the intensive and extensive margins as well as on the congruence between consumers' preferences and the supply and diversity of products. We show that fixed exchange rate regimes are preferred for high enough labor supply elasticities. Fixed exchange rate regimes are unambigously better when entry occurs at the same time as production in each period. Fixed exchange rate regimes are less attractive in the presence of production lags and higher love of product diversity.
http://hdl.handle.net/10993/25338
https://ideas.repec.org/p/luc/wpaper/13-18.html

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