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Exchange Rate Pass-Through And Its Relation To Market Power: Reinterpretation Of The Degree Of Exchange Rate Pass-Through

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  • Kim, MinKyoung
  • Cho, Guedae
  • Koo, Won W.

Abstract

We propose a different perspective for interpretation of exchange rate pass-through: a relatively lower (higher) degree of pass-through implies a competitive (less competitive) market. Using three different wheat exporting countries, the United States, Canada, and Australia, and two importing countries, Japan and Korea, we are not likely to reject our hypothesis. In the competitive market (Japan), the exporting countries determine their prices based on changes in the competing country's price, and as a result, there is a close-to-zero degree of exchange rate pass-through. However, a lower degree of price competition and a significantly higher degree of exchange rate pass-through are found in a less competitive market (Korea).

Suggested Citation

  • Kim, MinKyoung & Cho, Guedae & Koo, Won W., 2003. "Exchange Rate Pass-Through And Its Relation To Market Power: Reinterpretation Of The Degree Of Exchange Rate Pass-Through," 2003 Annual meeting, July 27-30, Montreal, Canada 21908, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea03:21908
    DOI: 10.22004/ag.econ.21908
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    Cited by:

    1. Castellares, Renzo, 2017. "Condiciones de mercado y calidad como determinantes del traspaso del tipo de cambio," Revista Estudios Económicos, Banco Central de Reserva del Perú, issue 33, pages 29-41.

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    Agribusiness;

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