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Covid-19 Shock: Pass-Through to Consumer Prices in Tunisia

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  • Leila Baghdadi

    (University of Tunis)

  • Inmaculada Martínez-Zarzoso
  • Amal Medini

Abstract

In this paper, we evaluate the pass-through of the COVID-19 shock on international prices and trade policy to consumer prices in Tunisia. Specifically, we evaluate the extent to which changes in import unit values, tariffs, non-tariff measures, and new export restrictions imposed by Tunisia’s partner countries during COVID-19 are transmitted into consumer prices in Tunisia. Using monthly data from January 2018 to December 2020, a pass-through equation is estimated using sectoral panel data at the retail-product level, and we apply linear panel data techniques that account for unobserved heterogeneity in the dimensions of the panel. We augment the empirical specification with factors related to the current macroeconomic environment derived from the COVID-19 outbreak and persistence. The results provide important insights for Tunisian policymakers.

Suggested Citation

  • Leila Baghdadi & Inmaculada Martínez-Zarzoso & Amal Medini, 2022. "Covid-19 Shock: Pass-Through to Consumer Prices in Tunisia," Working Papers 1535, Economic Research Forum, revised 20 Feb 2022.
    • Handle: RePEc:erg:wpaper:1535
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