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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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    References listed on IDEAS

    as
    1. Paulo Gala, 2007. "Real Exchange Rate Levels And Economic Development: Theoretical Analysis And Empirical Evidence," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 037, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    2. Javier Cravino & Andrei A. Levchenko, 2017. "The Distributional Consequences of Large Devaluations," American Economic Review, American Economic Association, vol. 107(11), pages 3477-3509, November.
    3. 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.
    4. Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
    5. Ms. Agnes A Belaisch, 2003. "Exchange Rate Pass-Through in Brazil," IMF Working Papers 2003/141, International Monetary Fund.
    6. Mart�n Rapetti & Peter Skott & Arslan Razmi, 2012. "The real exchange rate and economic growth: are developing countries different?," International Review of Applied Economics, Taylor & Francis Journals, vol. 26(6), pages 735-753, April.
    7. Morten O. Ravn & Harald Uhlig, 2002. "On adjusting the Hodrick-Prescott filter for the frequency of observations," The Review of Economics and Statistics, MIT Press, vol. 84(2), pages 371-375.
    8. Barry Eichengreen, 2008. "The Real Exchange Rate and Economic Growth," World Bank Publications - Books, The World Bank Group, number 28013, October.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    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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