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Estimating the Exchange Rate Pass-Through to Prices in Mexico

Author

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  • Josué Fernando Cortés Espada

    (Banco de México)

Abstract

This paper estimates the magnitude of the exchange rate pass-through to consumer prices in Mexico. Moreover, it analyzes if the pass-through dynamics have changed in recent years. In particular, it uses a methodology that generates results consistent with the hierarchy implicit in the cpi. The results suggest that the exchange rate pass-through to the general price level is low and not statistically significant. However, the pass-through is positive and significant for goods prices. Furthermore, the exchange rate pass-through declined over the 2000s and the depreciation observed in 2011 did not change this trajectory.

Suggested Citation

  • Josué Fernando Cortés Espada, 2013. "Estimating the Exchange Rate Pass-Through to Prices in Mexico," Monetaria, CEMLA, vol. 0(2), pages 287-316, July-Dece.
    • Handle: RePEc:cml:moneta:v:i:y:2013:i:2:p:287-316
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    References listed on IDEAS

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    6. Khemraj, Tarron & Pasha, Sukrishnalall, 2009. "The determinants of non-performing loans: an econometric case study of Guyana," MPRA Paper 53128, University Library of Munich, Germany.
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    Cited by:

    1. Tunç, Cengiz, 2017. "A Survey on Exchange Rate Pass through in Emerging Markets," Bulletin of Economic Theory and Analysis, BETA Journals, vol. 2(3), pages 205-233, July-Sept.

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    More about this item

    Keywords

    depreciation; inflation; exchange rate pass-through; pass-through elasticity;
    All these keywords.

    JEL classification:

    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics

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