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Import Price Rigidity and Invoice Currency in Russia
[Валюта Контракта И Жесткость Цен На Импортные Товары В России]

Author

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  • Pleskachev, Yury (Плескачев, Юрий)

    (Russian Presidential Academy of National Economy and Public Administration)

  • Ponomarev, Yury (Пономарев, Юрий)

    (Gaidar Institute for Economic Policy)

Abstract

This paper examines the relationship between the import price rigidity and the invoice currency of goods imported to Russia. Microdata on the import of goods to Russia over a period from 2002 to 2015 allowed to assess the degree of price rigidity to the exchange rate fluctuations at a disaggregated level, which is the first time this kind of research was applied to the Russian economy. The empirical estimates of prices of goods denominated in different currencies are in line with similar results available in the world literature on price rigidity and exchange rate pass-through. According to panel data analysis, prices of imported goods denominated in domestic currency (Russian ruble) show little reaction to exchange rate fluctuations, while prices of imported goods denominated in foreign currency (US dollar, euro) almost completely copy the dynamics of exchange rate movements. This paper also documents sector-dependent differences of influence of the invoice currency on the degree of the imported goods price rigidity to fluctuations in the exchange rate. Some imported goods denominated in Russian ruble do not show complete price rigidity to exchange rate fluctuations, for example, products of plant origin, textiles, and headgear. Deviation from zero rigidity to the exchange rate shocks for imported goods denominated in foreign currencies is observed only for fats and oils of animal or vegetable origin.

Suggested Citation

  • Pleskachev, Yury (Плескачев, Юрий) & Ponomarev, Yury (Пономарев, Юрий), 2017. "Import Price Rigidity and Invoice Currency in Russia [Валюта Контракта И Жесткость Цен На Импортные Товары В России]," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 3, pages 80-99, June.
  • Handle: RePEc:rnp:ecopol:ep1733
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    References listed on IDEAS

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    Cited by:

    1. Sinyakov, A. & Chernyadyev, D. & Sapova, A., 2019. "Estimating the Exchange Rate Pass-Through Effect on Producer Prices of Final Products Based on Micro-Data of Russian Companies," Journal of the New Economic Association, New Economic Association, vol. 41(1), pages 128-157.

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    More about this item

    Keywords

    price rigidity; exchange rates; pass-through; prices of imported goods; inflation.;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • 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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