This study has three main contributions. First, in order to capture the short-term dynamics of the exchange rate, we use monthly firm-level data combined with different measures of exchange rate and misalignment. Second, we examine the impact of both devaluation and exchange rate misalignment on ...
respond in the same manner regardless of the yen's direction. He argued that Japanese exporters absorb part of the yen's movement into their profit margins, an action that reduces the profit on each item sold when the yen appreciates and raises the profit margin when the yen depreciates. Al...