Title: Pass-through of exchange rates and import prices to domestic inflation in some industrialized economies
Description: "This paper examines the impact of exchange rates and import prices on the domestic producer price index and consumer price index in selected industrialized economies.  The empirical model is a vector autoregression incorporating a distribution chain of pricing.  When the model is estimated over the post-Bretton Woods era, impulse responses indicate that exchange rates have a modest effect on domestic price inflation while import prices have a stronger effect.  Pass-through is larger in countries with a larger import share and more persistent exchange rates and import prices.  Over 1996-98, these external factors have had a sizable disinflationary effect in many of the countries, but not in the United States.  Estimating the model using post-1982 data has little effect on these conclusions"--Federal Reserve Bank of New York web site.
Subjects: Foreign exchange rates, Imports, Inflation (Finance), Prices, Exchange rate pass-through