Abstract Exchange rate plays a very important role in the pricing process of international trade. How the changes in exchange rate affect the price of trade goods in international trade is of great research significance. However, the analyses in the traditional economic theory on the mechanism of the influence of interest rate on trade mainly focused on the flexibility of goods, etc, but ignored such elements as market power and product substitution, etc. On the basis of the market structure of the sellers, the authors analyzed how the changes in exchange rate affect the pricing of export goods in the case of the existence of market power and product substitution of different manufacturers and concluded that market power and product substitution of different manufacturers make exchange rate transfer incomplete.
2011, Vol. 28 
