Exchange Rate Pass-Through in the Global Economy
AbstractThis paper estimates export and import price equations for 40 countries – including 19 emerging market economies (EMEs) – and aims to understand heterogeneity across countries in the degree of exchange rate pass-through to import and to export prices. Results indicate that (i) the elasticities of trade prices are sizeable in EMEs, and higher on average than in advanced economies for export prices; (ii) such elasticities are primarily influenced by macroeconomic factors; (iii) export and import price elasticities tend to be strongly correlated across countries; (iv) lower exchange rate pass-through in the United States, compared to other advanced economies, can be related to the geographical distribution of U.S. imports, more heavily concentrated in countries with high elasticity of export prices. Overall, these results yield an enhanced understanding of exchange rate pass-through, emphasizing the role of external factors.
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Bibliographic InfoPaper provided by Banque de France in its series Working papers with number 424.
Length: 32 pages
Date of creation: 2013
Date of revision:
emerging market economies; exchange rate pass-through; terms of trade.;
Find related papers by JEL classification:
- F10 - International Economics - - Trade - - - General
- F30 - International Economics - - International Finance - - - General
- F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-03-09 (All new papers)
- NEP-DEV-2013-03-09 (Development)
- NEP-INT-2013-03-09 (International Trade)
- NEP-MON-2013-03-09 (Monetary Economics)
- NEP-OPM-2013-03-09 (Open Economy Macroeconomic)
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- Dées, Stéphane & Burgert, Matthias & Parent, Nicolas, 2008.
"Import price dynamics in major advanced economies and heterogeneity in exchange rate pass-through,"
Working Paper Series
0933, European Central Bank.
- Stephane Dees & Matthias Burgert & Nicolas Parent, 2013. "Import price dynamics in major advanced economies and heterogeneity in exchange rate pass-through," Empirical Economics, Springer, vol. 45(2), pages 789-816, October.
- Stephane Dees & Matthias Burgert & Nicolas Parent, 2008. "Import Price Dynamics in Major Advanced Economies and Heterogeneity in Exchange Rate Pass-Through," Working Papers 08-39, Bank of Canada.
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