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Pass-Through of Exchange Rates to Prices in Serbia: 2001-2007


  • Nikola Tasic

    (National Bank of Serbia)


This paper estimates the pass-through effect of the exchange rate to prices in Serbia. Results obtained using ADL and VAR methodology suggest that the effect of exchange rate to inflation is Serbia is relatively high, but, as it is the case in most countries and previous studies on Serbia, incomplete and well below one. The estimate of the passthrough effect obtained using ADL methodology is between 0.13 and 0.31 in the short-run, and between 0.19 and 0.50 in the long-run. During the depreciation of the domestic currency (against the nominal effective exchange rate constructed from euro and U.S. dollar) the effect is considerably higher, and it reaches even 0.90 when we look at the retail price index.

Suggested Citation

  • Nikola Tasic, 2008. "Pass-Through of Exchange Rates to Prices in Serbia: 2001-2007," Working papers 10, National Bank of Serbia.
  • Handle: RePEc:nsb:wpaper:10

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    pass-through effect; exchange rate; inflation; depreciation;

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • F31 - International Economics - - International Finance - - - Foreign Exchange
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation


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