Importers, exporters, and exchange rate disconnect

Mary Amiti, Oleg Itskhoki, Jozef Konings

Research output: Contribution to journalArticlepeer-review

158 Citations (Scopus)


Large exporters are simultaneously large importers. We show that this pattern is key to understanding low aggregate exchange rate pass- through as well as the variation in pass-through across exporters. We develop a theoretical framework with variable markups and imported inputs, which predicts that firms with high import shares and high market shares have low exchange rate pass-through. We test and quantify the theoretical mechanism using Belgian firm-product-level data on imports and exports. Small nonimporting firms have nearly complete pass-through, while large import-intensive exporters have pass-through around 50 percent, with the marginal cost and markup channels contributing roughly equally.

Original languageEnglish
Pages (from-to)1942-1978
Number of pages37
JournalAmerican Economic Review
Issue number7
Publication statusPublished - Jul 2014

ASJC Scopus subject areas

  • Economics and Econometrics

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