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- Title
Hysteresis in Trade.
- Authors
Baldwin, R.
- Abstract
The paper presents a model of hysteresis in trade which is based on the existence of sunk market-entry costs. The study concentrates on the aspect of two models. In both models an exchange rate overvaluation leads to additional entry by foreign firms. The models differ in their accounts of why the foreign firms do not exit after the exchange rate shock passes.
- Subjects
HYSTERESIS (Economics); FOREIGN exchange rates; ECONOMICS
- Publication
Empirical Economics, 1990, Vol 15, Issue 2, p127
- ISSN
0377-7332
- Publication type
Article
- DOI
10.1007/BF01973449