Is a Low-inflation Environment Associated with Reduced Exchange Rate Pass Through?
AbstractThis 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 InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Finnish Economic Association in its journal Finnish Economic Papers.
Volume (Year): 19 (2006)
Issue (Month): 2 (Autumn)
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
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Jonathan McCarthy, 2007.
"Pass-Through of Exchange Rates and Import Prices to Domestic Inflation in Some Industrialized Economies,"
Eastern Economic Journal,
Eastern Economic Association, vol. 33(4), pages 511-537, Fall.
- Jonathan McCarthy, 2000. "Pass-through of exchange rates and import prices to domestic inflation in some industrialized economies," Staff Reports 111, Federal Reserve Bank of New York.
- J. McCarthy, 1999. "Pass-through of exchange rates and import prices to domestic inflation in some industrialised economies," BIS Working Papers 79, Bank for International Settlements.
- Pinelopi K. Goldberg & Michael M. Knetter, 1996.
"Goods Prices and Exchange Rates: What Have We Learned?,"
NBER Working Papers
5862, National Bureau of Economic Research, Inc.
- Pinelopi Koujianou Goldberg & Michael M. Knetter, 1997. "Goods Prices and Exchange Rates: What Have We Learned?," Journal of Economic Literature, American Economic Association, vol. 35(3), pages 1243-1272, September.
- Baldwin, Richard & Krugman, Paul, 1989.
"Persistent Trade Effects of Large Exchange Rate Shocks,"
The Quarterly Journal of Economics,
MIT Press, vol. 104(4), pages 635-54, November.
- Richard Baldwin & Paul R. Krugman, 1986. "Persistent Trade Effects of Large Exchage Rate Shocks," NBER Working Papers 2017, National Bureau of Economic Research, Inc.
- Taylor, John B., 2000. "Low inflation, pass-through, and the pricing power of firms," European Economic Review, Elsevier, vol. 44(7), pages 1389-1408, June.
- Owen Evens & Thomas H. Mayer & Philip M. Young & Horst Ungerer, 1986. "The European Monetary System: Recent Developments," IMF Occasional Papers 48, International Monetary Fund.
- Dixit, Avinash K, 1989. "Hysteresis, Import Penetration, and Exchange Rate Pass-Through," The Quarterly Journal of Economics, MIT Press, vol. 104(2), pages 205-28, May.
- Menon, Jayant, 1995. " Exchange Rate Pass-Through," Journal of Economic Surveys, Wiley Blackwell, vol. 9(2), pages 197-231, June.
- Abdulnasser Hatemi-J & Manuchehr Irandoust, 2004. "Is Pricing to Market Behavior a Long-Run Phenomenon? A Non-Stationary Panel Analysis," Empirica, Springer, vol. 31(1), pages 55-67, March.
- Nidhaleddine Ben cheikh, 2012.
"Long-run exchange rate pass-through: evidence from new panel data techniques,"
AccessEcon, vol. 32(3), pages A24.
- 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.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Editorial Secretary).
If references are entirely missing, you can add them using this form.