firm entry; product diversity; exchange rate system
Abstract :
[en] This paper studies how the choice of xed or exible exchange rate regimes is a¤ected
by the existence of intensive and extensive margins. We study two models where rms
enter during or before each period of production. We show how 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 xed 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.
Disciplines :
Microeconomics
Author, co-author :
Hamano, Masashige ; University of Luxembourg > Faculty of Law, Economics and Finance (FDEF) > Center for Research in Economic Analysis (CREA) ; Sophia University Tokyo > Yotsuya Campus
Language :
English
Title :
Extensive and intensive margins and the choice of exchange rate regimes
