Pass-through of external shocks along the pricing chain: A panel estimation approach for the euro area
AbstractIn this paper we analyse in a mark-up framework the pass-through of commodity price and exchange rate shocks to the main components of producer and consumer prices. Thereby we link movements in prices at the different production stages as firms set their prices as a mark-up over production costs. The empirical results reveal significant linkages between different price stages in the euro area. The overall results are roughly in line with the literature and provide insight into the effects at different stages of the production chain. Non-energy commodity prices turn out to be important determinants of euro area prices. JEL Classification: E31, E37
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Bibliographic InfoPaper provided by European Central Bank in its series Working Paper Series with number 1104.
Date of creation: Nov 2009
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Find related papers by JEL classification:
- E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
- E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
This paper has been announced in the following NEP Reports:
- NEP-ALL-2009-11-21 (All new papers)
- NEP-CBA-2009-11-21 (Central Banking)
- NEP-EEC-2009-11-21 (European Economics)
- NEP-MON-2009-11-21 (Monetary Economics)
- NEP-OPM-2009-11-21 (Open Economy Macroeconomic)
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