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Sectoral Exchange Rate Pass-through: an empirical analysis for the Brazilian economy

Author

Listed:
  • Maria Luiza Cunha

    (Cedeplar/UFMG)

  • Frederico Gonzaga Jayme Jr

    (Cedeplar/UFMG)

  • Clara Zanon Brenck

    (Cedeplar/UFMG)

Abstract

This paper provides an empirical assessment of the sectoral pass-through effect for the Brazilian economy, focusing on the final consumer perspective. To do so, we analyze the impulse response functions of an exchange rate depreciation shock on the main Brazilian consumer price index (IPCA) subgroups. The results indicate a heterogeneous effect across sectors, which varies according to the market competition structure, the production structure of the industry, and the greater or lesser presence of imported inputs. Sectors characterized by the production of non-tradables show a non-significant response to the shock. This discussion segregated by consumption groups is relevant as it opens paths for investigating the extent to which exchange rate pass-through may generate distributive effects.

Suggested Citation

  • Maria Luiza Cunha & Frederico Gonzaga Jayme Jr & Clara Zanon Brenck, 2026. "Sectoral Exchange Rate Pass-through: an empirical analysis for the Brazilian economy," Textos para Discussão Cedeplar-UFMG 700, Cedeplar, Universidade Federal de Minas Gerais.
    • Handle: RePEc:cdp:texdis:td700
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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
    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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