The exchange rate pass-through to import and export prices : the role of nominal rigidities and currency choice / Ehsan U. Choudhri and Dalia S. Hakura.

By:

Choudhri, Ehsan U [author.]

Contributor(s):

Material type: Text

TextSeries: IMF working paper ; WP/12/226.Publication details: Washington, D.C. : International Monetary Fund, Institute for Capacity Development, 2012.Description: 1 online resource (34 pages)Content type:

text

Media type:

computer

Carrier type:

online resource

ISBN:

9781475589801
1475589808

Subject(s):

Genre/Form:

Electronic books.

DDC classification:

332.4/5 23

LOC classification:

HG3821 .C46 2012eb

Online resources:

EBSCOhost

Summary: "Using both regression- and VAR-based estimates, the paper finds that the exchange rate pass-through to import prices for a large number of countries is incomplete and larger than the pass-through to export prices. Previous studies have reported similar results, which give rise to the puzzle that while local currency pricing is needed to account for incomplete import price pass-through, it would not imply a lower export price passthrough. Recent explanations of this puzzle have emphasized markup adjustment in response to exchange rate changes. This paper suggests an alternative explanation based on the presence of both producer and local currency pricing. Using a dynamic general equilibrium model, the paper shows that a mix of producer and local currency pricing can explain the pass-through evidence even with a constant markup. The model can also explain the observed exchange rate and inflation variability as well as the fact that the regression and VAR estimates tend to be similar."--Abstract.

Holdings ( 1 )
Title notes ( 4 )

Holdings
Item type	Current library	Collection	Call number	Status	Date due	Barcode	Item holds
eBook	e-Library	EBSCO Business		Available

Total holds: 0

"September 2012."

"Using both regression- and VAR-based estimates, the paper finds that the exchange rate pass-through to import prices for a large number of countries is incomplete and larger than the pass-through to export prices. Previous studies have reported similar results, which give rise to the puzzle that while local currency pricing is needed to account for incomplete import price pass-through, it would not imply a lower export price passthrough. Recent explanations of this puzzle have emphasized markup adjustment in response to exchange rate changes. This paper suggests an alternative explanation based on the presence of both producer and local currency pricing. Using a dynamic general equilibrium model, the paper shows that a mix of producer and local currency pricing can explain the pass-through evidence even with a constant markup. The model can also explain the observed exchange rate and inflation variability as well as the fact that the regression and VAR estimates tend to be similar."--Abstract.

Includes bibliographical references.

Master record variable field(s) change: 050