01841cas a2200253 a 4500 AALejournalIMF014286 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475526394 1018-5941 BD-DhAAL BD-DhAAL Chen, Natalie. Quality, Trade, and Exchange Rate Pass-Through / Natalie Chen, Luciana Juvenal. Washington, D.C. : International Monetary Fund, 2014. 1 online resource (58 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 theoretically and empirically the heterogeneous response of exporters to real exchange rate fluctuations due to product quality. Our model shows that the elasticity of demand perceived by exporters decreases with a real depreciation and with quality, leading to more pricing-to-market and to a smaller response of export volumes to a real depreciation for higher quality goods. We test the proposed theory using a highly disaggregated Argentinean firm-level wine export dataset between 2002 and 2009 combined with experts wine rankings as a measure of quality. The model predictions find strong support in the data and the results are robust to different measures of quality, samples, specifications, and to the potential endogeneity of quality. Mode of access: Internet Juvenal, Luciana. IMF Working Papers; Working Paper ; No. 2014/042 Full text available on IMF http://elibrary.imf.org/view/journals/001/2014/042/001.2014.issue-042-en.xml IMF e-Library