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Explaining the Exchange Rate Pass-Through in Different Prices Author info | Abstract | Publisher info | Download info | Related research | Statistics Hamid Faruqee
Dalia Hakura
Ehsan U. Choudhri
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This paper examines the performance of different new open economy macroeconomic models in explaining the exchange rate pass-through in a wide range of prices. Quantitative versions of different models are used to derive the dynamic response of various prices to an exchange rate shock. Predicted responses are compared with the evidence based on VAR models to examine how well different models fit the data. The results show that the best-fitting model incorporates a number of features highlighted by different strands of the literature: sticky prices, sticky wages, distribution costs, and a combination of local and producer currency pricing.
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Paper provided by International Monetary Fund in its series IMF Working Papers with number
02/224.
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Length: 32 pages
Date of creation: 07 Jan 2003Date of revision:
Handle: RePEc:imf:imfwpa:02/224Contact details of provider: Postal: International Monetary Fund, Washington, DC USA Phone: (202) 623-7000 Fax: (202) 623-4661 Email: Web page: http://www.imf.org/external/pubind.htm More information through EDIRC
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Keywords: Exchange rates Prices Economic models Other versions of this item:
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