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SUMMARY:Invoicing and Pricing-to-market: Evidence from UK Exports/Imports 
 Transactions - Meredith Crowley\, Department of Economics
DTSTART:20191112T191500Z
DTEND:20191112T213000Z
UID:TALK134860@talks.cam.ac.uk
CONTACT:Peter Watson
DESCRIPTION:We document that\, while the share of the pound and vehicle cu
 rrencies are stable over time in the aggregate\, at a granular level UK ex
 porters invoice in more than one currency---even for the same product in a
  given destination---\, and switch between invoicing currencies. We provid
 e evidence that a firm's choice of invoicing currencies matters for exchan
 ge rate pass through and markup adjustment. We show that\, in response to 
 the large sterling depreciation after the Brexit referendum\, exchange rat
 e pass-through was very high for UK exports invoiced in sterling\, but nea
 r zero for exports invoiced in a vehicle or in local currency. These diffe
 rences narrow in four to six quarters\, as export prices aligned with the 
 weaker pound. Econometric evidence suggests that destination specific mark
 up adjustment (i.e.\, pricing to market) is systematically associated only
  with transactions invoiced in local currency---not with transactions invo
 iced in pounds sterling or vehicle currencies.
LOCATION:The Lightfoot Room\, Divinity School\, St John’s College\, St J
 ohn’s Street\, Cambridge CB2 1TP
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