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A note on transfer prices and exchange rate pass-through

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Abstract

The paper builds a model of a parent corporation selling an intermediate product to a foreign subsidiary. The model is used to explain the response of foreign prices to changes in the exchange rate between the country of the parent affiliate and the foreign subsidiary. The model examines this response with and without an external market for the intermediate product.

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Authors and Affiliations

  1. Department of Economics, Auburn University at Montgomery, 36124, Montgomery, AL

    Charles E. Hegji

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  1. Charles E. Hegji
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Hegji, C.E. A note on transfer prices and exchange rate pass-through. J Econ Finan 27, 396–403 (2003). https://doi.org/10.1007/BF02761573

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  • DOI: https://doi.org/10.1007/BF02761573

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