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摘要
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This paper investigates effects of exchange rate
on optimal trade policies and market prices within a standard export subsidy
model. Shifts in exchange rate change relative efficiencies of firms in
different countries. We show that depreciation of own currency increases
subsidy levels when marginal cost is constant. Import dependency weakens this
relationship, decreasing sensitivity of subsidy levels to depreciation. In
general, subsidies reduce exchange rate pass-through. Additionally, perverse
exchange rate pass-through effect arises with
sufficiently intensive subsidies.
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