Estimating the Exchange Rate Pass-Through to Prices in Mexico

Josué Fernando Cortés Espada
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Josué Fernando Cortés Espada: Banco de México

Monetaria, 2013, vol. I, issue 2, 287-316

Abstract: This paper estimates the magnitude of the exchange rate pass-through to consumer prices in Mexico. Moreover, it analyzes if the pass-through dynamics have changed in recent years. In particular, it uses a methodology that generates results consistent with the hierarchy implicit in the cpi. The results suggest that the exchange rate pass-through to the general price level is low and not statistically significant. However, the pass-through is positive and significant for goods prices. Furthermore, the exchange rate pass-through declined over the 2000s and the depreciation observed in 2011 did not change this trajectory.

Keywords: depreciation; inflation; exchange rate pass-through; pass-through elasticity (search for similar items in EconPapers)
JEL-codes: E31 F31 F41 (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (1)

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