Exchange rate pass-through to Swedish import prices
AbstractSwedish import price determination is investigated using disaggregated monthly data from 1980:1 to 1995:05 for eight different industries. The cointegration analysis indicates two cOintegrating relations, in all industries, between import prices, the exchange rate, world market prices and domestic prices. Two-equations systems involve an unclear definition of long-run exchange rate pass-though. Passthrough is defined as the total effect a nominal exchange-rate change has on the import price. The estimate thus includes the direct effect on import prices as well as the effect working through home market prices. Total pass-through estimates indicate a limited pass-through and thus pricing to market behaviour in the majority of industries. Tests of linear restrictions on the cointegrating vectors indicate, in a more formal, statistical sense, a complete long-run pass-through in most industries.
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Bibliographic InfoArticle provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 10 (1997)
Issue (Month): 2 (Autumn)
Other versions of this item:
- Adolfson, Malin, 1996. "Exchange Rate Pass-Through to Swedish Import Prices," Working Paper Series in Economics and Finance 123, Stockholm School of Economics.
- F31 - International Economics - - International Finance - - - Foreign Exchange
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
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