Pass-Through to Import Prices: Evidence from Developing Countries
AbstractIn this paper I study the pass-through of nominal exchange rate changes to the price of imported goods in four developing countries. The results indicate that 75% of changes in the exchange rate are passed-through to the domestic currency price of imported goods within one quarter. Complete pass-through is attained within one year. There is no evidence that exchange rate pass-through to the price of imported goods has declined over time even in those countries that have managed to reduce inflation significantly and open their economies to foreign competition.
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Bibliographic InfoPaper provided by Instituto de Economia. Pontificia Universidad Católica de Chile. in its series Documentos de Trabajo with number 320.
Date of creation: 2007
Date of revision:
Exchange rate pass-through; local currency pricing; macroeconomics of developing countries;
Find related papers by JEL classification:
- F31 - International Economics - - International Finance - - - Foreign Exchange
- 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-2007-08-18 (All new papers)
- NEP-CBA-2007-08-18 (Central Banking)
- NEP-IFN-2007-08-18 (International Finance)
- NEP-MON-2007-08-18 (Monetary Economics)
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- José De Gregorio, 2009. "Exchange Rates, Real Adjustment and Monetary Policy," Economic Policy Papers Central Bank of Chile 34, Central Bank of Chile.
- Jinbin Wang & Nan Li, 2010. "Exchange rate pass-through: The case of China," Frontiers of Economics in China, Springer, vol. 5(3), pages 356-374, September.
- Roberto Álvarez & Patricio Jaramillo & Jorge Selaive, 2008. "Exchange Rate Pass-Through into Import Prices: The Case of Chile," Working Papers Central Bank of Chile 465, Central Bank of Chile.
- Michael Pedersen, 2010. "Propagation of Inflationary Shocks in Chile and an International Comparison of Progagation of Shocks to food and Energy Prices," Working Papers Central Bank of Chile 566, Central Bank of Chile.
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