01757cas a2200241 a 4500 AALejournalIMF000386 230101c9999 xx r poo 0 0eng d 5.00 USD 9781451960822 1018-5941 BD-DhAAL BD-DhAAL Ricci, Luca. Exchange Rate Regimes and Location / Luca Ricci. Washington, D.C. : International Monetary Fund, 1997. 1 online resource (32 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students This paper investigates the effects of fixed versus flexible exchange rates on firms' location choices and on countries' specialization patterns. In a two-country, two-differentiated-goods monetary model, demand, supply, and monetary (as well as exchange rate) shocks arise after wages are set and prices are optimally chosen. The paper finds that countries are more specialized under flexible than fixed rates, and that the pattern of specialization is not uniquely defined by trade models but depends also on the exchange rate regime. The adoption of fixed exchange rates endogenously increases the desirability of this currency area by reducing the shock asymmetry. These results also shed light on the effects of exchange rate variability on trade. Mode of access: Internet IMF Working Papers; Working Paper ; No. 1997/069 Full text available on IMF http://elibrary.imf.org/view/journals/001/1997/069/001.1997.issue-069-en.xml IMF e-Library