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Exchange Rate Pass-Through to Domestic Prices: Evidence Analysis of a Periphery Country

Author

Listed:
  • Dardouri Nesrine

    (Faculty of Economics and Management of Sousse, Lab MOFID, University of Sousse, Sousse, Tunisia)

  • Aguir Abdelkader

    (Lab ESPI2R (Groupe ESPI), Lyon, France)

  • Smida Mounir

    (Faculty of Economics and Management of Sousse, Lab MOFID, University of Sousse, Sousse, Tunisia)

Abstract

This study aims to examine the context in which the exchange-rate pass-through influences domestic prices in Tunisia by applying vector error correction models. To ensure the robustness of the results obtained from the autoregressive model, additional diagnostic tests were performed. Our analysis indicates that fluctuations in the nominal effective exchange rate (NEER) have an enduring impact on customer prices. This research aims to review how the fluctuations in exchange rates and import prices can impact domestic prices in Tunisia. Our findings demonstrate that NEER fluctuations affect consumer prices in both the short and long term, highlighting its significant role in long-term inflation.

Suggested Citation

  • Dardouri Nesrine & Aguir Abdelkader & Smida Mounir, 2025. "Exchange Rate Pass-Through to Domestic Prices: Evidence Analysis of a Periphery Country," Economics - The Open-Access, Open-Assessment Journal, De Gruyter, vol. 19(1), pages 1-12.
    • Handle: RePEc:bpj:econoa:v:19:y:2025:i:1:p:12:n:1001
    DOI: 10.1515/econ-2025-0154
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    Keywords

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    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F31 - International Economics - - International Finance - - - Foreign Exchange

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