Is a Low-inflation Environment Associated with Reduced Exchange Rate Pass Through?
Abstract
This paper investigates the extent of pass through from the US dollar exchange rate to consumer prices in the European Union. A relatively new line of empirical research is pursued that considers whether or not the extent of exchange rate pass through is related to the inflationary environment. In contrast to previous empirical studies, recently developed panel data cointegrating techniques to measure long run pass through are employed. While there is evidence that long-run pass through has declined since the 1970s, it actually increased during the early ERM years despite the presence of lower inflation.Download Info
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Article provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 19 (2006)
Issue (Month): 2 (Autumn)
Pages: 58-68
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Related research
Keywords:Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
- F49 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Other
References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- Nidhaleddine Ben Cheikh, 2012.
"Long Run Exchange Rate Pass-Through: Evidence from New Panel Data Techniques,"
Economics Working Paper Archive (University of Rennes 1 & University of Caen)
201225, Center for Research in Economics and Management (CREM), University of Rennes 1, University of Caen and CNRS.
- Ben Cheikh, Nidhaleddine, 2011. "Long run exchange rate pass-through: Evidence from new panel data techniques," MPRA Paper 39663, University Library of Munich, Germany.
- Nidhaleddine Ben Cheikh, 2012. "Long Run Exchange Rate Pass-Through: A Panel Cointegration Approach," FIW Working Paper series 078, FIW.
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