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Eventos

Brown Bag Seminars

Currency choices in international trade: are services different from goods?

Guest speaker

Joana Garcia (Bank of Portugal)

Local

EEG UMinho & Online

Date

Start15.03.2023 13:15End15.03.2023 14:15

Event summary

Abstract

Despite the increasingly important role of services in international trade, the literature studying the determinants of currency choices in these transactions focuses exclusively on trade in goods. Relying on a novel dataset detailing the currency used by Portuguese firms in extra and intra-EU services and goods trade, we offer new evidence about currency choices in services transactions and assess to what extent there are meaningful differences relative to goods trade. Our results are consistent with a key role of complementarities in price setting and input-output linkages in shaping currency choices both in goods and in services trade. Moreover, our findings indicate that those two mechanisms contribute to a less prevalent role of the US dollar in services trade that does not involve the US than in goods trade.

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