Exchange-rate pass-through in the G-7 countries
By: Jane E. Ihrig, Mario Marazzi, Alexander D. Rothenberg
Contributors: Marazzi, Mario; Rothenberg, Alexander D.; Board of Governors of the Federal Reserve System (U.S.)
Series: International finance discussion papers -- no. 851; International finance discussion papers (Online) -- no. 851.
Publisher: Federal Reserve Board
Published: 2006
Place of publication: Washington, D.C
Language: eng
Format: [electronic resource] /
Description: "This paper examines the current thinking on exchange-rate pass-through to both import prices and consumer prices and estimates the extent to which they have fallen in the G-7 countries since the late 1970s and 1980s.  For import-price pass-through we find that all countries experience a numerical decline in the responsiveness of import prices to exchange-rate movements; for nearly half of these countries the decline between 1975-1989 and 1990-2004 is statistically significant.  We estimate that while a 10 percent depreciation in the local currency would have increased import prices by nearly 7 percent on average across these countries in the late 1970s and 1980s, it would have only increased import prices by 4 percent in the last 15 years.  The responsiveness of consumer prices to exchange-rate movements declines for nearly every country, with the decline being statistically significant for two countries.  Specifically, while a 10 percent depreciation in the local currency would have increased consumer prices by almost 2 percent on average in the late 1970s and 1980s, it would have had a neutral effect on consumer prices in the last 15 years"--Federal Reserve Board web site.
Notes: Title from PDF file as viewed on 3/20/2006.

Includes bibliographical references.

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