Exchange-rate pass-through at the product level

Guillaume Gaulier (), Amina Lahrèche-Révil and Isabelle Méjean ()

Canadian Journal of Economics, 2008, vol. 41, issue 2, pages 425-449

Abstract: We use a detailed database to investigate exchange-rate pass-through at the product level for a large number of countries. The empirical analysis suggests that pricing behaviours are dichotomous, with complete pass-through in around 25% of sectors and significant pricing-to-market in the remaining ones. Average long-run pass-through coefficient is close to 80%; this result hides a strong heterogeneity of pass-through behaviours across sectors. Even when composition effects are controlled for, average pass-through varies across importing countries. The econometric analysis shows that pass-through tends to be higher in volatile environments; in less developed countries; in weakly integrated markets.

JEL-codes: F12 F31 F41 (search for similar items in EconPapers)
Date: 2008
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Related works:
Working Paper: Exchange-Rate Pass-Trough at the Product Level (2006)
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