Advanced Search
MyIDEAS: Login

Import prices and pricing-to-market effects in the euro area

Contents:

Author Info

Registered author(s):

    Abstract

    Pricing-to-market (PTM) behaviour implies that exporters adjust their prices to the prevailing prices in their export markets. For the importing country, PTM effects can be interpreted as a measure of the stability of domestic prices against foreign price and exchange rate developments. PTM behaviour can be attributed to the level of competitiveness and price stickiness in the importing country. This paper investigates PTM behaviour in the euro area from the importing country’s perspective, for both individual countries and the euro area as a whole. Analysis firstly involves the estimation of PTM effects in the five largest euro area countries. Secondly, PTM effects in the euro area as a whole are estimated to be slightly higher than one half. The results from illustrative simulations suggest that the increase in euro-area inflation during the first two years of monetary union can be largely attributed to oil price and exchange rate developments.

    Download Info

    If 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.
    File URL: http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp299.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by European Central Bank in its series Working Paper Series with number 299.

    as in new window
    Length: 36 pages
    Date of creation: Jan 2004
    Date of revision:
    Handle: RePEc:ecb:ecbwps:20040299

    Contact details of provider:
    Postal: Postfach 16 03 19, Frankfurt am Main, Germany
    Phone: +49 69 1344 0
    Fax: +49 69 1344 6000
    Web page: http://www.ecb.europa.eu/home/html/index.en.html
    More information through EDIRC

    Order Information:
    Postal: Press and Information Division, European Central Bank, Kaiserstrasse 29, 60311 Frankfurt am Main, Germany
    Email:

    Related research

    Keywords: Printing-to-market; import prices; exchange-rate pass-through; euro area.;

    Find related papers by JEL classification:

    This paper has been announced in the following NEP Reports:

    References

    References listed on IDEAS
    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.:
    as in new window
    1. Gross, Dominique M. & Schmitt, Nicolas, 2000. "Exchange rate pass-through and dynamic oligopoly: an empirical investigation," Journal of International Economics, Elsevier, vol. 52(1), pages 89-112, October.
    2. Holger Brauer, 1999. "Price Setting in International Markets," Kiel Working Papers 915, Kiel Institute for the World Economy.
    3. Bergin, Paul R. & Feenstra, Robert C., 2001. "Pricing-to-market, staggered contracts, and real exchange rate persistence," Journal of International Economics, Elsevier, vol. 54(2), pages 333-359, August.
    4. International Monetary Fund, 2001. "Monetary and Exchange Rate Policies of the Euro Area," IMF Staff Country Reports 01/60, International Monetary Fund.
    5. Khalaf, Lynda & Kichian, Maral, 2000. "Testing the Pricing-to-Market Hypothesis: Case of the Transportation Equipment Industry," Working Papers 00-8, Bank of Canada.
    6. Dolado, Juan José & Banerjee, Anindya & Mestre, Ricardo, . "Error-correction Mechanism Tests for Cointegration in a Single-equation Framework," Open Access publications from Universidad Carlos III de Madrid info:hdl:10016/3275, Universidad Carlos III de Madrid.
    7. Michael Devereux & Charles Engel & Cedric Tille, 1999. "Exchange-Rate Pass-Through and the Welfare Effects of the Euro," Discussion Papers in Economics at the University of Washington 0034, Department of Economics at the University of Washington.
    8. Julian Benedict Morgan & Silvia Fabiani, 2003. "Aggregation and euro area Phillips curves," Working Paper Series 213, European Central Bank.
    9. Bernhofen, Daniel M. & Xu, Peng, 2000. "Exchange rates and market power: evidence from the petrochemical industry," Journal of International Economics, Elsevier, vol. 52(2), pages 283-297, December.
    10. Hamid Faruqee, 1995. "Pricing to Market and the Real Exchange Rate," IMF Working Papers 95/12, International Monetary Fund.
    11. Gabriel Fagan & Jérôme Henry & Ricardo Mestre, 2001. "An area-wide model (AWM) for the euro area," Working Paper Series 42, European Central Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as in new window

    Cited by:
    1. Stahn, Kerstin, 2009. "Changes in import pricing behaviour: the case of Germany," Discussion Paper Series 1: Economic Studies 2009,14, Deutsche Bundesbank, Research Centre.
    2. Manh Ha Duong & Camille Logeay & Sabine Stephan & Rudolf Zwiener & Serhiy Yahnych, 2005. "Modelling European Business Cycles (EBC Model): A Macroeconometric Model of Germany ; Version March 2005," Data Documentation 5, DIW Berlin, German Institute for Economic Research.
    3. Bussière, Matthieu & Peltonen, Tuomas, 2008. "Exchange rate pass-through in the global economy – the role of emerging market economies," BOFIT Discussion Papers 25/2008, Bank of Finland, Institute for Economies in Transition.
    4. Sophocles N. Brissimis & Theodora S. Kosma, 2005. "Market power, innovative activity and exchange rate pass-through in the euro area," Working Paper Series 531, European Central Bank.
    5. Sabine Stephan, 2005. "Pricing-to-Market Effects in Foreign Trade Prices. Evidence from a Cointegration Approach for Germany," IMK Working Paper 07-2005, IMK at the Hans Boeckler Foundation, Macroeconomic Policy Institute.
    6. Kerstin Stahn, 2011. "Changes in Import Pricing Behaviour: Evidence for Germany," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(4), pages 522-545, August.
    7. Benkovskis, Konstantins, 2005. "Econometric analysis and forecasting of Latvia's balance of payments," MPRA Paper 23274, University Library of Munich, Germany.
    8. Kerstin Stahn, 2007. "Has the Export Pricing Behaviour of German Enterprises Changed? Empirical Evidence from German Sectoral Export Prices," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 227(3), pages 295-329, June.

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ecb:ecbwps:20040299

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Official Publications).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.