Year: 2023
Type: article
Abstract: We estimate how the rate of pass-through from the exchange rate to domestic prices varies across states of the economy and depending on the shocks that drive fluctuations in the exchange rate. We confirm several results from the literature and uncover new facts. Drawing on the experience of a large sample of advanced and emerging market economies over the past 30 years, we document that exchange rate pass-through significantly larger during periods of high inflation and elevated uncertainty. Using a novel identification strategy, we also show that pass-through is higher when exchange rate fluctuations are driven by U.S. monetary policy.
Source: IMF Working Paper
Authors: Yan Carriere-Swallow, Melih Firat, Davide Furceri, Daniel Jimenez
Institution: International Monetary Fund
Language: English
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W4378086563