New estimates of exchange rate pass-through in Japanese exports An earlier version of this paper was presented at the 10th International Convention of the East Asian Economic Association in Beijing, China
AbstractRecently, the issue of a decline in exchange rate pass-through has gained much more attention. Taylor conjectures that a worldwide decline in exchange rate pass-through is related to the low and stable inflation in many industrialized countries since the early 1990s. Developments of 'new open-economy macroeconomics' also cast renewed attention on exchange rate pass-through. Theoretical research shows that the choice of an optimal exchange rate regime and the transmission of monetary policy impacts depend crucially on the exporter's price setting behaviour. There are many studies on the pass-through of Japanese exports, yet most studies simply use the industry-breakdown data on export price indices, which is insufficient to assess pass-through patterns in regional trade. Significantly, highly disaggregated (HS 9-digit level) commodity data are used here to evaluate the extent of pass-through by commodity and by destination. We investigate and compare the extent of pass-through to East Asia, Europe, and the US. We also examine whether there is any difference in the degree of pass-through in the pre- and post-Asian crisis era. Results suggest the most pricing-to-market (PTM) occurs in exports to the US market followed by significant, but less PTM in Europe. Virtually no PTM is found in Japanese exports to East Asia. Also, there is no clear evidence of either increasing or decreasing pass-through over time. Copyright © 2007 John Wiley & Sons, Ltd.
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 John Wiley & Sons, Ltd. in its journal International Journal of Finance & Economics.
Volume (Year): 13 (2008)
Issue (Month): 2 ()
Contact details of provider:
Web page: http://www.interscience.wiley.com/jpages/1076-9307/
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.:
- Kiyotaka Sato, 2003. "Currency Invoicing in Japanese Exports to East Asia: Implications for Yen Internationalization," Asian Economic Journal, East Asian Economic Association, vol. 17(2), pages 129-154, 06.
- Robert C. Feenstra, 1987.
"Symmetric Pass-Through of Tariffs and Exchange Rates Under Imperfect Competition: An Empirical Test,"
NBER Working Papers
2453, National Bureau of Economic Research, Inc.
- Feenstra, Robert C., 1989. "Symmetric pass-through of tariffs and exchange rates under imperfect competition: An empirical test," Journal of International Economics, Elsevier, vol. 27(1-2), pages 25-45, August.
- Takatoshi Ito & Kiyotaka Sato, 2006.
"Exchange Rate Changes and Inflation in Post-Crisis Asian Economies: VAR Analysis of the Exchange Rate Pass-Through,"
06018, Research Institute of Economy, Trade and Industry (RIETI).
- Takatoshi Ito & Kiyotaka Sato, 2006. "Exchange Rate Changes and Inflation in Post-Crisis Asian Economies: VAR Analysis of the Exchange Rate Pass-Through," NBER Working Papers 12395, National Bureau of Economic Research, Inc.
- Takatoshi Ito & Kiyotaka Sato, 2006. "Exchange Rate Changes and Inflation in Post-Crisis Asian Economies: VAR Analysis of the Exchange Rate Pass-Through," CIRJE F-Series CIRJE-F-406, CIRJE, Faculty of Economics, University of Tokyo.
- 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.
- 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.
- David C. Parsley, 2004.
"Pricing in International Markets: a "Small-country" Benchmark,"
Review of International Economics,
Wiley Blackwell, vol. 12(3), pages 509-524, 08.
- David C. Parsley, 2001. "Pricing in International Markets: A 'Small Country' Benchmark," Working Papers 112001, Hong Kong Institute for Monetary Research.
- David Parsley, 2002. "Pricing in International Markets: a 'Small-Country' Benchmark," International Finance 0211002, EconWPA.
- Kiyotaka Sato, 1999. "The International Use of the Japanese Yen: The Case of Japan's Trade with East Asia," The World Economy, Wiley Blackwell, vol. 22(4), pages 547-584, 06.
- Gil-Pareja, Salvador, 2002. "Export Price Discrimination in Europe and Exchange Rates," Review of International Economics, Wiley Blackwell, vol. 10(2), pages 299-312, May.
- Otani, Akira & Shiratsuka, Shigenori & Shirota, Toyoichiro, 2006. "Revisiting the Decline in the Exchange Rate Pass-Through: Further Evidence from Japan's Import Prices," Monetary and Economic Studies, Institute for Monetary and Economic Studies, Bank of Japan, vol. 24(1), pages 61-75, March.
- Marston, Richard C., 1990. "Pricing to market in Japanese manufacturing," Journal of International Economics, Elsevier, vol. 29(3-4), pages 217-236, November.
- Craig R. Parsons & Kiyotaka Sato, 2006. "Exchange Rate Pass-through and Currency Invoicing: Implications for Monetary Integration in East Asia," The World Economy, Wiley Blackwell, vol. 29(12), pages 1759-1788, December.
- Kenichi Ohno, 1989. "Export Pricing Behavior of Manufacturing: A U.S.: Japan Comparison," IMF Staff Papers, Palgrave Macmillan, vol. 36(3), pages 550-579, September.
- Baoying Lai & Nathan Lael Joseph, 2010. "Pricing-to-market and the volatility of UK export prices," Applied Financial Economics, Taylor & Francis Journals, vol. 20(18), pages 1441-1460.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If references are entirely missing, you can add them using this form.