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Response of Domestic Prices to Exchange Rate Movements in Argentina

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  • Yu Hsing

Abstract

Based on an extended IS-LM-AS model, this study finds that if the Argentine peso depreciates 1% versus the U.S. dollar, the consumer price in Argentina would increase by 0.2518%. In addition, more structural fiscal deficit as a percent of potential GDP, more M2 supply, a higher U.S. price level, and a higher expected price level would raise Argentina's consumer price level. Therefore, partial exchange rate pass-through is confirmed for Argentina.

Suggested Citation

  • Yu Hsing, 2021. "Response of Domestic Prices to Exchange Rate Movements in Argentina," Business and Economic Research, Macrothink Institute, vol. 11(2), pages 218-226, June.
    • Handle: RePEc:mth:ber888:v:11:y:2021:i:2:p:218-226
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    References listed on IDEAS

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    Cited by:

    1. Michael Takudzwa Pasara & Vincent Mugwira, 2023. "Exchange Rate (MIS-) Alignment: An Application of the Behavioural Equilibrium Exchange Rate (beer) Approach to Zimbabwe (1990-2018)," International Journal of Economics and Financial Issues, Econjournals, vol. 13(5), pages 128-141, September.
    2. Frank, Luis, 2023. "Revisión del traslado a precios de la devaluación del tipo de cambio oficial durante el per\'iodo 2017-2023 en Argentina [Review of the devaluation of the official exchange rate pass-through to pri," MPRA Paper 117904, University Library of Munich, Germany.

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    More about this item

    Keywords

    Exchange rate pass-through; Currency depreciation; Consumer prices; Money supply; Crude oil prices;
    All these keywords.

    JEL classification:

    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General
    • Z0 - Other Special Topics - - General

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