Exchange Rate Pass‐through: How Much do Exchange Rate Changes Affect the Prices of Australian Exports?

Robyn Swift

Australian Economic Papers, 1998, vol. 37, issue 2, 169-184

Abstract: Australia is generally held to be a small open economy with a high proportion of commodity exports. It is therefore regarded as a ‘price taker’ in international markets, and pass‐through on exports is expected to be zero. This paper uses the Johansen Multivariate Cointegration technique to estimate the pass‐through of exchange rate changes to the destination‐currency prices of aggregate Australian exports. The results demonstrate a stable long‐run pass‐through level of 60 per cent, which refutes the ‘small‐country’ assumption of Australian exporters as price takers. These findings have important implications for Australia's terms of trade and current account deficit

Date: 1998
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://doi.org/10.1111/1467-8454.00013

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:ausecp:v:37:y:1998:i:2:p:169-184

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0004-900X

Access Statistics for this article

Australian Economic Papers is currently edited by Daniel Leonard

More articles in Australian Economic Papers from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().