Explaining the Exchange Rate Pass-Through in Different Prices /

This paper examines the performance of different new open economy macroeconomic models in explaining the exchange rate pass-through in a wide range of prices. Quantitative versions of different models are used to derive the dynamic response of various prices to an exchange rate shock. Predicted resp...

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Autor principal: Faruqee, Hamid
Altres autors: Choudhri, Ehsan, Hakura, Dalia
Format: Revista
Idioma:English
Publicat: Washington, D.C. : International Monetary Fund, 2002.
Col·lecció:IMF Working Papers; Working Paper ; No. 2002/224
Accés en línia:Full text available on IMF
Descripció
Sumari:This paper examines the performance of different new open economy macroeconomic models in explaining the exchange rate pass-through in a wide range of prices. Quantitative versions of different models are used to derive the dynamic response of various prices to an exchange rate shock. Predicted responses are compared with the evidence based on VAR models to examine how well different models fit the data. The results show that the best-fitting model incorporates a number of features highlighted by different strands of the literature: sticky prices, sticky wages, distribution costs, and a combination of local and producer currency pricing.
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Descripció física:1 online resource (32 pages)
Format:Mode of access: Internet
ISSN:1018-5941
Accés:Electronic access restricted to authorized BRAC University faculty, staff and students