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Exchange-rate pass-through at the product level

Listed author(s):
  • Isabelle Méjean

    (Department of Economics, Ecole Polytechnique - Polytechnique - X - CNRS - Centre National de la Recherche Scientifique)

  • Guillaume Gaulier

    (Banque de France)

  • Amina Lahreche-Révil

    (CEPII - Centre d'Etudes Prospectives et d'Informations Internationales - Centre d'analyse stratégique, University of Amiens - UPJV - Université de Picardie Jules Verne)

We use a detailed database to investigate exchange-rate pass-through at the product level for a large number of countries. The empirical analysis suggests that pricing behaviours are dichotomous, with complete pass-through in around 25% of sectors and significant pricing-to-market in the remaining ones. Average long-run pass-through coefficient is close to 80%; this result hides a strong heterogeneity of pass-through behaviours across sectors. Even when composition effects are controlled for, average pass-through varies across importing countries. The econometric analysis shows that pass-through tends to be higher in volatile environments; in less developed countries; in weakly integrated markets.

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Paper provided by HAL in its series Post-Print with number hal-00363075.

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Date of creation: May 2008
Publication status: Published in Canadian Journal of Economics, 2008, 41 (2), pp.425-449. <10.1111/j.1365-2966.2008.00469.x>
Handle: RePEc:hal:journl:hal-00363075
DOI: 10.1111/j.1365-2966.2008.00469.x
Note: View the original document on HAL open archive server: https://hal.archives-ouvertes.fr/hal-00363075
Contact details of provider: Web page: https://hal.archives-ouvertes.fr/

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