Heterogeneity in the exchange rate pass-through to consumer prices: the Swiss franc appreciation of 2015

Alex Oktay

Swiss Journal of Economics and Statistics, 2022, vol. 158, issue 1, 1-20

Abstract: Abstract This paper analyzes the exchange rate pass-through to consumer prices for 85 categories of goods and services in Switzerland. The pass-through estimates are computed using a synthetic difference-in-differences approach that exploits the large Swiss franc appreciation that followed the unexpected removal of the Swiss franc-Euro floor in January 2015. The overall 1-year all-items pass-through is 0.12, which shows that the pass-through is highly incomplete. There is an important heterogeneity across product categories, where pass-through can be as high as 0.80. These variations are linked to the international trade characteristics of the products, as the prices of goods with a high degree of international tradability, with a high import share, or that depend on tourism are shown to be more sensitive to the exchange rate.

Keywords: Exchange rate pass-through; Inflation; Currency appreciation; Product heterogeneity (search for similar items in EconPapers)
JEL-codes: E31 F31 F41 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1186/s41937-022-00102-7

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