Heterogeneous Exchange Rate Research Articles

Heterogeneous exchange rate pass-through in Mexico: What drives it?

In this paper, we focus on the pass-through of exchange rate fluctuations into prices of final goods and services and examine whether contrasting pass-through rates are associated with regional and/or product-specific characteristics. Using CPI micro-data from 2002 to 2010, we estimate industry-specific rates of pass-through across regions in Mexico. By looking at within-country price responses, we alleviate shortcomings of cross-country studies that assess pass-through determinants. The results indicate that pass-through rates differ across regions and industries: low pass-through regions exhibit nearly one-quarter of the elasticity shown by high pass-through regions after twelve months. This heterogeneity prevails at longer horizons. The findings suggest that full pass-through is rejected for all regions and industries. Most of these differences in transmission rates are explained by regional and product characteristics: demand conditions, economic development, distance to the US border, import intensity, price change dispersion and expenditure share play a clear role in increasing pass-through, whereas market density dampens pass-through rates. The evidence confirms pricing-to-market theories and has implications for the design of monetary and exchange rate policies.

Methane dissociation mechanism on Ni–La1−xSrxScO3−α cermet for proton ceramic electrochemical devices

In this study, we investigated the methane dissociation mechanism over a Ni–La0.90Sr0.10ScO2.95 (Ni-LSS) cermet using hydrogen/deuterium (H/D) exchange with the gas phase equilibration in the framework of the H/D exchange types approach. The measurements were conducted in the temperature range of 100–450 °C at 200 Pa methane and hydrogen mixtures (5, 10, 20 and 95 mol% methane). The hydrogen heterogeneous exchange rate between methane and Ni-LSS was found to be 2 × 1011 atom. × cm−2 × s−1 at 300 °C and 200 Pa methane and hydrogen mixture (10 mol% methane) with activation barrier 0.03 ± 0.09 eV. The rate-determining step of H/D exchange between the Ni-LSS and the mixtures is supposed to be associated with the exchange between methane adsorbed species (CHx)a and hydrogen adatoms in the adsorption layer of the cermet. The methane dissociation on the cermet can lead to the formation of dimer molecules C2H6, C2H4 and C2H2 in the gas phase from (CHx)a (x = 1–3).

Analysis of Iron (III) Perchlorate at Magnetically Modified Electrodes

Electrochemical reactions drive many chemical processes using well established protocols and hardware. Most improvements of electrochemical reactions require substantial changes to existing protocols and equipment, However, our previous work has shown that electrochemical systems may be impacted by the presence of magnetic field gradients at the electrode surface. Using ion exchange polymer films with embedded magnetic microparticles, it is possible to improve reaction kinetics. Previous cyclic voltammetric studies of metal tris-bipyridine complexes at electrodes modified with composite films of Nafion and magnetized microparticles exhibit substantially higher currents than at electrodes modified with simple Nafion films.The aim of this study is to show magnetic field gradients can enhance currents for redox probes other than metal tris-bipyridine complexes and to use methods alternative to cyclic voltammetry (CV). Iron (III) perchlorate is the first transition metal species evaluated by impedance to exhibit enhanced electron transfer rates at electrodes modified with magnetized microparticles in Nafion. The enhancement is attributed to improvements in kinetics of heterogeneous exchange rate and self exchange rate.Electrochemical impedance spectroscopy (EIS) and CV studies at magnetically modified electrodes are compared to non-magnetic analogs for the iron (III) perchlorate redox couple. This redox couple shows kinetic rate enhancements for the magnetically modified electrodes over the non-magnetic analogs.

Applicability of gas-phase isotope exchange method for investigation of porous materials

Oxygen transport in ceramic oxide materials has been actively explored over the past decades. This is due to the desire to design high-temperature electrochemical devices for energy conversion. The research of oxygen transport is connected with necessity in understanding of processes proceeding between oxide materials and oxygen of gas phase. It is known that some functional parts of electrochemical devices have porous structure. Known methods for analyzing the kinetic interaction of oxygen in the gas phase and oxygen oxide, such as the use of 18O-labeled oxygen, are not always applicable for the study of porous materials. The paper shows the applicability of the isotope exchange method with the gas phase analysis to investigate porous ceramic materials using the La0.6Sr0.4MnO3–δ catalytic materials for oxygen reduction reaction. These measurements were taken in situ on materials with different porosity at temperature 800 °C and oxygen pressure 0.67 kPa. This paper shows the relationship between the intrinsic heterogeneous exchange rate (rH) and oxygen diffusion coefficient (D), and the effective apparent values obtained on the porous sample.

Effect of grain boundaries in La0.84Sr0.16CoO3-δ on oxygen diffusivity and surface exchange kinetics.

The single crystal and polycrystalline specimens of La0.84Sr0.16CoO3-δ oxide were synthesized and characterized by X-ray powder diffraction analysis, energy dispersive X-ray microanalysis, the electron backscatter diffraction technique, and X-ray photoelectron spectroscopy. A thin slab was prepared from the grown single crystal with its surface corresponding to the (110) plane. The kinetics of the oxygen exchange between the gas phase and a single crystal and a polycrystalline specimen was studied by means of 16O/18O oxygen isotope exchange at T = 750-850 °C and PO2 = 5.3 × 10-3-2.2 × 10-2 atm. Temperature dependencies of the oxygen heterogeneous exchange rate, the oxygen dissociative adsorption and incorporation rates, and oxygen diffusion coefficients were obtained. The relationship between the crystallographic orientation of oxides and the kinetic parameters of oxides has been established. Correlations between the surface state and the rates of individual stages of oxygen exchange as well as oxygen diffusion pathways in the single crystal compared with those in the polycrystalline specimen are considered.

Oxygen isotope exchange with La0.6Sr0.4Co1−yFeyO3−δ (y = 0.0, 0.2) oxides

Oxygen surface exchange kinetics of La0.6Sr0.4Co1−yFeyO3−δ (y = 0.0, 0.2) have been studied by the isotope exchange method with gas phase equilibration using a static circulation experimental rig in the oxygen pressure range of 0.13–8.53 kPa and temperature of 600–800 °C. The values of the oxygen diffusion coefficient and the rates of the elementary stages have been calculated. Doping of iron into the La0.6Sr0.4Co1−yFeyO3-δ has been shown to reduce the heterogeneous exchange rate, the oxygen diffusion coefficient and the rates of the elementary stages. Probable reasons for such behavior are discussed.

Oxygen isotope exchange in praseodymium nickelate

Oxygen surface exchange kinetics and diffusion were studied in Pr2NiO4 + δ (PNO) by the isotope exchange method with gas phase equilibration in the temperature range of 600–800 °C and oxygen pressure range of 0.33–1.62 kPa. The oxygen heterogeneous exchange rate (rH), oxygen diffusion coefficient (D), rates of oxygen dissociative adsorption (ra), and oxygen incorporation (ri) were calculated along with the apparent activation energies of oxygen surface exchange and diffusion processes. The temperature dependence of rH was found to benon-linear in Arrhenius coordinates. The apparent activation energy changed from 1.4 ± 0.2 eV at T > 700 °C to 2.0 ± 0.1 eV. This might be attributed to the change in the rate-determining stage of oxygen exchange for Pr2NiO4 + δ at T ~ 700 °C, because of a shift in the ratio between ra and ri caused by the difference in their activation energies. Possible reasons for the observed changes in the rate-determining stage are discussed.

Multi‐product exporters, variable markups and exchange rate fluctuations

AbstractIn this paper we investigate how firms adjust markups across products in response to fluctuations in the real exchange rate. We estimate markups at the market–product–plant level using detailed panel production and cost data from Mexican manufacturing between 1994 and 2007. Exploiting variation in the real exchange rate in the aftermath of the peso crisis in December 1994, we provide robust empirical evidence that plants increase their markups and producer prices in response to a real depreciation and that this increase is greater for products with higher productivity. Thus, we provide direct evidence for the theoretical mechanism of variable markup response behind incomplete and heterogeneous exchange rate pass‐through on producer prices. Our empirical methodology allows us to decompose the producer price response to exchange rate shocks into a markup and a marginal cost component using our markup estimates. Using these estimates, we establish that marginal cost at the product–plant level increases more in response to real exchange rate depreciation if the plant has higher share of imported inputs.

Oxygen isotope exchange and diffusion in LnBaCo2O6 − δ (Ln = Pr, Sm, Gd) with double perovskite structure

The interaction of oxygen in the gas phase with double perovskites LnBaCo2O6−δ (Ln=Pr, Sm, Gd) was studied by the isotope exchange method with gas phase equilibration in the temperature range of 600–850°C and the oxygen pressure range of 1.3·10−3–6.6·10−2atm. The oxygen nonstoichiometry of the oxides was determined by means of the thermogravimetric analysis as a function of oxygen partial pressure and temperature in the ranges −3≤log(Po2/atm)≤−0.68 and 600≤T, °C≤850, respectively. The influence of the oxygen nonstoichiometry on the heterogeneous exchange rate and the oxygen tracer diffusion coefficient was discussed. The rate-determining stage of the oxygen surface exchange kinetics for PrBaCo2O6−δ was found to be different in comparison with SmBaCo2O6−δ and GdBaCo2O6−δ. The possible reasons of this observation were considered.

Oxygen isotope exchange and electrical conductivity of CaZr1–x Sc x O3–x/2

The effect of scandium content in CaZr1–xScxO3–x/2 on electrical conductivity and oxygen exchange kinetics was investigated. The electrical conductivity was studied by means of impedance spectroscopy depending on temperature (700–850 °С) and oxygen partial pressure (2.1 · 104 > pO2 > 10–15 Pa). The oxygen exchange kinetics was studied using the isotope exchange method with gas phase equilibration in the temperature range of 700–850 °С and oxygen pressures of 0.13–6.7 kPa. The oxygen tracer diffusion coefficient, the oxygen heterogeneous exchange rate, and the electrical conductivity of oxides with the growing scandium content were found to increase. It was assumed that the electronic defects play an important role in the oxygen surface exchange.

Explaining the Smile in Currency Options: Is it Anchoring?

An anchoring adjusted currency option pricing formula is developed in which the risk of the underlying currency is used as a starting point which gets adjusted upwards to arrive at the currency call risk. Anchoring bias implies that such adjustments are insufficient. The new formula converges to the Garman-Kohlhagen formula in the absence of anchoring bias. Anchoring bias generates the implied volatility smile if investors hold heterogeneous exchange rate expectations.

Export Performance, Invoice Currency and Heterogeneous Exchange Rate Pass‐through

AbstractUsing comprehensive, shipment‐level merchandise trade data for a small, open economy, we examine heterogeneity in exporters' exchange rate pass‐through (ERPT) behaviour. We draw together two recent studies of ERPT, linking invoice currency decisions and firm performance to heterogeneity in ERPT. Like these studies, we find that the short‐run reaction of export unit values to exchange rate fluctuations is significantly related to both invoice currency choice and exporter characteristics when these are analysed separately. However, we then show that when the two factors are jointly accounted for, the role of exporter characteristics largely disappears. That is, some firm types are more inclined to invoice in the producer currency, while others use either the local or a vehicle currency. In the short run, this translates into differences in exchange rate pass‐through because of price rigidity in the invoice currency. Firm characteristics do not have an independent impact on pass‐through beyond their effect on currency composition. Differences across invoice currencies diminish over time, but do not disappear, as prices adjust to reflect bilateral exchange rate movements.

Export Performance, Invoice Currency, and Heterogeneous Exchange Rate Pass-Through

Using comprehensive, shipment-level merchandise trade data, we examine the extent to which New Zealand exporters maintain stable New Zealand dollar prices by passing on exchange rate changes to foreign customers. We find that the extent to which firms absorb exchange rate fluctuations in the short run is significantly related to both invoice currency choice and exporter characteristics when these are analysed separately. However, when jointly accounted for, the role of exporter characteristics largely disappears. That is, some firm types are more inclined to invoice in the New Zealand dollar, while others use either the importer or a third currency. In the short run, this translates into differences in exchange rate pass-through because of price rigidity in the invoice currency. Differences across invoice currencies diminish, but do not disappear, over time as prices adjust to reflect bilateral exchange rate movements.

Testing the uncovered interest parity using traded volatility, a time-varying risk premium and heterogeneous expectations

This paper carries out an empirical investigation of an extended version of Flood and Marion's (2000, Self-fulfilling risk predictions: an application to speculative attacks. Journal of International Economics 50, 245–268) UIP model, which incorporates a nonlinear time-varying risk premium that depends on both the expected variance of the future exchange rate and the relative worldwide private holdings of domestic and foreign government bonds. A novel contribution of our paper is the use of traded currency volatility, which is directly observable in the market place, to measure expectations about the future volatility of the exchange rate. Another contribution is the explicit modelling of heterogeneous exchange rate expectations formed by forward-looking fundamentalists and backward-looking chartists. Our overall empirical evidence provides strong support for the extended nonlinear UIP model. We also investigate for the first time the role of traded volatility in the dynamic behaviour of exchange rates, and find that high currency volatility is likely to produce oscillatory and unstable exchange rate paths.

Central Bank Intervention and Heterogeneous Exchange Rate Expectations: Evidence from the Daily DEM/US-Dollar Exchange Rate

In this paper we propose a generalisation of the noise trader transmission mechanism to examine the impact of central bank intervention on exchange rates. Within a heterogeneous expectation exchange rate model intervention operations are supposed to provide support for chartist or fundamentalist forecasts, which forces portfolio managers to adjust their foreign currency positions. The empirical examination of the hypothesis is done by applying a Markov regime-switching approach to daily DEM/US-dollar exchange rates and intervention data of the Deutsche Bundesbank and the Federal Reserve from 1979 to 1992. It is shown that chartist’s profits rose whenever these central banks intervened on the foreign exchange market. This is not true for those who follow a fundamentalist approach.