TY  - JOUR
AU  - Gopinath,Gita
AU  - Rigobon,Roberto
TI  - Sticky Borders
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12095
PY  - 2006
Y2  - March 2006
UR  - http://www.nber.org/papers/w12095
L1  - http://www.nber.org/papers/w12095.pdf
N1  - Author contact info:
Gita Gopinath
Department of Economics
Harvard University
1875 Cambridge Street
Littauer Center
Cambridge, MA 02138
Tel: 617/495-8161
Fax: 617/495-7730
E-Mail: gopinath@harvard.edu

Roberto Rigobon
Sloan School of Management
MIT, Room E52-442
50 Memorial Drive
Cambridge, MA 02142-1347
Tel: 617/258-8374
Fax: 617/258-6855
E-Mail: rigobon@mit.edu
M2  - featured in NBER digest on 2006-03-20
AB  - The stickiness and currency of pricing of traded goods play a central role in international macroeconomics, however empirical evidence on these features is seriously limited. To address this we use microdata on U.S. import and export prices at-the-dock for the period 1994-2005, and present four main results: First, the median price duration in the currency of pricing is 10.6 (12.8) months for imports (exports). Second, 90% (97%) of imports (exports) are priced in dollars. Consequently, contrary to standard modeling assumptions, for the U.S, there is producer currency pricing in exports and local currency pricing in imports. Third, import price rigidity has increased by 10 percentage points, with increasing rigidity in differentiated goods prices. Fourth, even conditioning on a price change, exchange rate pass-through into U.S. import prices is low, at 22%.
ER  -