This paper presents a new system for the consistent determination of import and export prices of manufactured products for use in the world trade block of the OECD INTERLINK model. It uses a system design which directly couples the bilateral determinants of export prices with the bilateral determinants of import prices. The results, however, will be obtained without the need for specific bilateral information other than the bilateral exchange rate. The model allows for price discrimination between different markets for the same exporter and features less than full pass-through of exchange rate movements into import prices ...
