Size matters
Subtitle: asymmetric exchange rate pass-through at the industry level
By: Patricia S. Pollard and Cletus C. Coughlin.
Contributors: Coughlin, Cletus C.; Federal Reserve Bank of St. Louis.
Series: Working paper ;; 2003-029C; Working paper (Federal Reserve Bank of St. Louis : Online) ;; 2003-029C.
Publisher: Federal Reserve Bank of St. Louis
Published: 2003
Place of publication: [St. Louis, Mo.]
Language: eng
Format: Electronic resource
Subjects: Foreign exchange rates.; Imports -- Prices.
Description: "Changes in costs faced by firms have direct implications for their price-cost margins.  Knowing how prices respond to such cost changes is crucial for understanding how individual markets function and, in turn, for understanding the macroeconomy.  We analyze exchange rate pass-through into U.S. import prices for 30 industries to address two questions related to this issue.  First, does the direction of a change in the exchange rate affect pass-through? Second, does the size of a change in the exchange rate matter for pass-through? We find that firms in over half the industries studied respond asymmetrically to appreciations and depreciations, but the direction of asymmetry varies.  Likewise, most firms respond asymmetrically to large and small changes in the exchange rate with pass-through positively related to the size of the change.  When taking into account both direction and size effects we find that the size effect dominates"--Federal Reserve Bank of St. Louis web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 1/28/2005.
Also available in print.
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Mode of access: World Wide Web.