Exchange rates: key drivers and effects on inflation and trade (2017-)

This research network started in February 2017. It focuses on the key determinants of exchange rate fluctuations and their impact on prices and trade volumes, with a particular focus on disaggregated data.

Countries in the region have recently experienced very significant swings in their nominal exchange rates, especially vis-à-vis the US dollar. The economies in the region are much more integrated commercially and financially than in the past. The influences of external factors on their exchange rates may have also increased. Against this backdrop, it is key for central banks in the region to investigate whether and why the determinants and the effects of currency movements on prices, trade and policies have changed.

A distinguishing feature of the research carried out as part of this network is the use of micro or disaggregated data on prices and quantities. This approach is expected to shed new light on old questions in international economics.

Ariel Burstein (University of California, Los Angeles) is the academic adviser for this network.