Exchange rate pass-through in a small open economy: Panel evidence from Hong Kong
This paper presents estimates of exchange rate pass-through derived from a panel of very disaggregated import unit-values to Hong Kong. The estimation approach builds on that utilized by Knetter (1989, 1993) to study export pricing and pricing to market. The three-dimensional data set examined comprises Hong Kong's top eight floating exchange rate trading partners, and twenty-one of the top 5-digit SITC imports since 1992. Pass-through estimates for Hong Kong imply relatively faster import price adjustment than is typically found for larger, less open economies. These estimates are robust to a number of sensitivity tests. Finally these results confirm, from a different perspective, findings by Parsley (2001) that deviations from the law of one price play a relatively smaller role in real exchange rate movements for Hong Kong to be supplies than for other East Asian countries. Copyright © 2003 John Wiley & Sons, Ltd.
Volume (Year): 8 (2003)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.interscience.wiley.com/jpages/1076-9307/|
|Order Information:||Web: http://jws-edcv.wiley.com/jcatalog/JournalsCatalogOrder/JournalOrder?PRINT_ISSN=1076-9307|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Pinelopi Koujianou Goldberg & Michael M. Knetter, 1997.
"Goods Prices and Exchange Rates: What Have We Learned?,"
Journal of Economic Literature,
American Economic Association, vol. 35(3), pages 1243-1272, September.
- Pinelopi K. Goldberg & Michael M. Knetter, 1996. "Goods Prices and Exchange Rates: What Have We Learned?," NBER Working Papers 5862, National Bureau of Economic Research, Inc.
- Marston, Richard C., 1990. "Pricing to market in Japanese manufacturing," Journal of International Economics, Elsevier, vol. 29(3-4), pages 217-236, November.
- Taylor, John B., 2000. "Low inflation, pass-through, and the pricing power of firms," European Economic Review, Elsevier, vol. 44(7), pages 1389-1408, June.
- Parsley, David C., 2007. "Accounting for real exchange rate changes in East Asia," Journal of International Money and Finance, Elsevier, vol. 26(8), pages 1355-1377, December.
- David C. Parsley, 2001. "Accounting for Real Exchange Rate Changes in East Asia," Working Papers 062001, Hong Kong Institute for Monetary Research.
- David Parsley, 2002. "Accounting for Real Exchange Rate Changes in East Asia," International Finance 0211003, EconWPA.
- Froot, Kenneth A & Klemperer, Paul D, 1989. "Exchange Rate Pass-Through When Market Share Matters," American Economic Review, American Economic Association, vol. 79(4), pages 637-654, September.
- Kenneth A. Froot & Paul Klemperer, 1988. "Exchange Rate Pass-Through When Market Share Matters," NBER Working Papers 2542, National Bureau of Economic Research, Inc.
- Yushi Yoshida & Shinji Takagi, 1999. "Exchange Rate Movements and Tradable Goods Prices in East Asia; An Analysis Based on Japanese Customs Data, 1988-98," IMF Working Papers 99/31, International Monetary Fund.
- Michael Bleaney, 1997. "Invoicing-Currency Effects in the Pricing of Japanese Exports of Manufactures," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 968-974, November.
- Irving B. Kravis & Robert E. Lipsey, 1975. "International Trade Prices and Price Proxies," NBER Chapters,in: The Role of the Computer in Economic and Social Research in Latin America, pages 253-268 National Bureau of Economic Research, Inc.
- Irving Kravis & Robert E. Lipsey, 1974. "International Trade Prices and Price Proxies," NBER Chapters,in: The Role of the Computer in Economic and Social Research in Latin America, pages 253-268 National Bureau of Economic Research, Inc.
- Catherine L. Mann, 1986. "Prices, profit margins, and exchange rates," Federal Reserve Bulletin, Board of Governors of the Federal Reserve System (U.S.), issue Jun, pages 366-379. Full references (including those not matched with items on IDEAS)