2017 Fiscal Year Final Research Report
Difference in Trade Pattern due to the Exchange Rate System
| Project/Area Number |
15K17027
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| Research Category |
Grant-in-Aid for Young Scientists (B)
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| Allocation Type | Multi-year Fund |
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| Research Field |
Economic theory
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| Research Institution | Waseda University (2017)
Sophia University (2015-2016) |
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Principal Investigator |
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| Research Collaborator |
PAPPADA Francesco Banque de France, International Macroeconomics Division(SEMSI)
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| Project Period (FY) |
2015-04-01 – 2018-03-31
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| Keywords | 為替レート / 企業の異質性 / 経常収支 / 金融政策 / 財の種類 |
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| Outline of Final Research Achievements |
Using Compnet data on firm size distribution of 15 UE countries over the past two decades, we show that the persistence of the current account is reduced when the exchange rate is more volatile and the dispersion of firm size distribution is smaller. We build an open economy dynamic model with firm heterogeneity and wage rigidity to rationalize this empirical finding. We find that the current account dynamics is sensitive to the dispersion of firm size as well as the conduct of monetary policy. The economy with lower firm dispersion tend to show a less persistent current account as the trade dynamics is driven by a larger turnover of firms in the exporting market.
Moreover, monetary policy can dampen current account imbalances through the stabilization of output gap following a simple Taylor rule. We show that the current account persistence is further reduced by such monetary policy in an economy where the firm size distribution is less dispersed.
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| Free Research Field |
国際貿易論、国際マクロ経済学
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