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- W1598049444 abstract "This note investigates effects of exchange rate uncertainty on optimal trade policies and market prices within a standard export subsidy model. As exchange rate changes, relative efficiencies of firms in different countries change. In accordance with the conventional result, we show that changes in expected exchange rate effects optimal subsidies through relative costs. In particular, increase in expected depreciation of own currency increases subsidy levels when marginal cost is constant. Introducing import dependency, however, violates this uniform relation, and subsidy levels may decrease with increasing depreciation. Subsidy levels always decrease in import dependency when depreciation is expected. We also show that market price is less sensitive to exchange rates, compared to the free trade case (no subsidies)." @default.
- W1598049444 created "2016-06-24" @default.
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- W1598049444 date "2007-01-01" @default.
- W1598049444 modified "2023-09-23" @default.
- W1598049444 title "A Note on Export Subsidies and Exchange Rate Uncertainty" @default.
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- W1598049444 doi "https://doi.org/10.2139/ssrn.1029962" @default.
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