Response of Domestic Prices to Exchange Rate Movements in Argentina

Yu Hsing

Business and Economic Research, 2021, vol. 11, issue 2, 218-226

Abstract: Based on an extended IS-LM-AS model, this study finds that if the Argentine peso depreciates 1% versus the U.S. dollar, the consumer price in Argentina would increase by 0.2518%. In addition, more structural fiscal deficit as a percent of potential GDP, more M2 supply, a higher U.S. price level, and a higher expected price level would raise Argentina's consumer price level. Therefore, partial exchange rate pass-through is confirmed for Argentina.

Keywords: Exchange rate pass-through; Currency depreciation; Consumer prices; Money supply; Crude oil prices (search for similar items in EconPapers)
Date: 2021
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