Exchange rate pass-through into import prices
Subtitle: a macro or micro phenomenon?
By: Jos M̌anuel Campa and Linda S. Goldberg.
Contributors: Goldberg, Linda S.; Federal Reserve Bank of New York.
Series: Staff reports ;; no. 149; Staff reports (Federal Reserve Bank of New York : Online) ;; no. 149.
Publisher: Federal Reserve Bank of New York
Published: 2002
Place of publication: [New York, N.Y.]
Language: eng
Format: Electronic resource
Subjects: Imports -- Prices -- OECD countries.; Foreign exchange rates -- OECD countries.
Description: "Exchange rate regime optimality, as well as monetary policy effectiveness, depends on the tightness of the link between exchange rate movements and import prices.  Recent debates hinge on whether producer-currency-pricing (PCP) or local currency pricing (LCP) of imports is more prevalent, and on whether exchange rate pass-through rates are endogenous to a country's macroeconomic conditions.  We provide cross-country and time series evidence on both of these issues for the imports of twenty-five OECD countries.  Across the OECD and especially within manufacturing industries, there is compelling evidence of partial pass-through in the short-run-- rejecting both PCP and LCP.  Over the long run, PCP is more prevalent for many types of imported goods.  Higher inflation and exchange rate volatility are weakly associated with higher pass-through of exchange rates into import prices.  However, for OECD countries, the most important determinants of changes in pass-through over time are microeconomic and relate to the industry composition of a country's import bundle"--Federal Reserve Bank of New York web site.
Notes: Includes bibliographical references.
Title from PDF file as viewed on 3/1/2005.
Also available in print.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.