🌐 Global Economy 3d ago · Menzie Chinn

Guest Contribution: “Do Traditional Models or the Dominant Currency Paradigm Explain China’s Export Behavior?”

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Guest Contribution: “Do Traditional Models or the Dominant Currency Paradigm Explain China’s Export Behavior?”
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Today, we’re fortunate to have Willem Thorbecke, Senior Fellow at Japan’s Research Institute of Economy, Trade and Industry (RIETI) as a guest contributor. The views expressed represent those of the author himself, and do not necessarily represent those of RIETI, or any other institutions the author is affiliated with.

Do exchange rates affect exports.  Traditional models assume that they do. The Mundell-Fleming model posits that firms price exports in their own currency. A depreciation of the

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