The Leading eBooks Store Online 4,272,009 members ⚫ 1,419,367 ebooks

New to eBooks.com?

Learn more

The Exchange Rate Pass -Through to Import and Export Prices: The Role of Nominal Rigidities and Currency Choice

The Exchange Rate Pass -Through to Import and Export Prices: The Role of Nominal Rigidities and Currency Choice by Ehsan U. Choudhri
Buy this eBook
US$ 9.00
(If any tax is payable it will be calculated and shown at checkout.)
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 pass-through. 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.
International Monetary Fund; September 2012
34 pages; ISBN 9781475580617
Read online, or download in secure EPUB or secure PDF format
Title: The Exchange Rate Pass -Through to Import and Export Prices: The Role of Nominal Rigidities and Currency Choice
Author: Ehsan U. Choudhri; Dalia Hakura
 
ISBNs
1475580614
9781475510232
9781475580617
9781475589801