Exchange Rates, Local Currency Pricing and International Tax Policies

2018 ◽  
Author(s):  
Sihao Chen ◽  
Michael Devereux ◽  
Jenny Xu ◽  
Kang Shi
Keyword(s):  
Exchange Rates ◽  
Tax Policies ◽  
Local Currency ◽  
Local Currency Pricing ◽  
International Tax

The Ounce in Eighteenth-Century West African Trade

1966 ◽  
Vol 7 (2) ◽  
pp. 197-214 ◽  
Author(s):  
Marion Johnson
Keyword(s):  
Eighteenth Century ◽  
Exchange Rates ◽  
West African ◽  
Gold Coast ◽  
The West ◽  
Permanent Change ◽  
Local Currency ◽  
Prime Cost ◽  
A Value ◽  
Low Costs

The Ounce as a unit in the West African trade was originally applied to the goods which could be exchanged on the Gold Coast for one ounce of gold; it was generally reckoned that such goods would cost about 40s. in Europe, or half the European value of the gold. Calculations based on actual transactions show that the prime cost of an Ounce of goods was sometimes lower than this, when a favourable assortment of goods had been chosen. In the 1760's and 1770's gold was no longer being exported from the Gold Coast, but was demanded as part of the price of slaves; an ounce of gold was then valued at two Ounces of trade goods. The price of gold had risen, partly owing to a local stoppage of trade, and perhaps also because of a permanent change in the direction of Ashanti gold exports.At Whydah, the Ounce was not in use in the first half of the eighteenth century; values of goods, including cowries, the local currency, were expressed in terms of the quantity equivalent to one slave. By 1772 the Ounce had come into use at a value similar to that on the Gold Coast. The French selling cheap brandy, and the Portuguese selling cheap Brazilian tobacco, were able to operate at very low costs per Ounce.The ‘slave-price’ rigsdaler of Christiansborg, with regular exchange rates both with gold and with cowries, forms a link between the Gold and Slave Coast systems.A table of slave prices at various dates during the seventeenth and eighteenth centuries is given in terms of Ounces and other units.

Local Currency Pricing versus Producer Currency Pricing: Direct Evidence from German Exporters

2008 ◽  
Vol 9 (2) ◽  
pp. 160-179 ◽  
Author(s):  
Ralf Fendel ◽  
Christoph Swonke ◽  
Michael Frenkel
Keyword(s):  
Open Economy ◽  
Direct Evidence ◽  
Law Of One Price ◽  
Price Setting ◽  
Optimal Monetary Policy ◽  
Rate System ◽  
Local Currency ◽  
Pricing Behavior ◽  
Local Currency Pricing ◽  
Exchange Rate System

Abstract In new open-economy macroeconomic models, the assumption on the pricing behavior of firms in international trade plays a central role. Whether firms apply producer currency pricing (PCP) or local currency pricing (LCP) crucially affects, for example, the design of optimal monetary policy or the choice of the optimal exchange rate system. However, empirical evidence has so far been mixed and is furthermore mostly of an indirect nature. This paper draws direct evidence on the price-setting behavior of German exporters from a questionnaire-based survey. We find that PCP applies in more integrated markets. Differences between LCP firms and PCP firms mainly exist with respect to the use of mark-ups and in the validity of the law of one price for their respective products.

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