Sectoral Exchange Rate Pass-through: an empirical analysis for the Brazilian economy

Maria Luiza Cunha, Frederico Gonzaga Jayme Jr and Clara Zanon Brenck
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Maria Luiza Cunha: Cedeplar/UFMG
Frederico Gonzaga Jayme Jr: Cedeplar/UFMG
Clara Zanon Brenck: Cedeplar/UFMG

No 700, Textos para Discussão Cedeplar-UFMG from Cedeplar, Universidade Federal de Minas Gerais

Abstract: This paper provides an empirical assessment of the sectoral pass-through effect for the Brazilian economy, focusing on the final consumer perspective. To do so, we analyze the impulse response functions of an exchange rate depreciation shock on the main Brazilian consumer price index (IPCA) subgroups. The results indicate a heterogeneous effect across sectors, which varies according to the market competition structure, the production structure of the industry, and the greater or lesser presence of imported inputs. Sectors characterized by the production of non-tradables show a non-significant response to the shock. This discussion segregated by consumption groups is relevant as it opens paths for investigating the extent to which exchange rate pass-through may generate distributive effects.

Keywords: Pass-through; Sectoral Inflation; Tradable and non-Tradable. (search for similar items in EconPapers)
JEL-codes: E31 F41 O47 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2026-07
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