EXCHANGE RATE PASS-THROUGH TO DOMESTIC PRICES: THE CASE OF COLOMBIA

Peter Rowland ()

Revista ESPE - Ensayos Sobre Política Económica, 2004, vol. 22, issue 47, No 2684, 106-125

Abstract: This study uses an econometric framework based on an unrestricted vector autoregressive (VAR) model to study exchange rate pass-through to import, producer and consumer prices in Colombia. Exchange rate pass-through is shown to be incomplete. Import prices, nevertheless, respond quickly to an exchange rate change, where some 80 percent of such a change is passed onto prices of imports within 12 months. The corresponding figure for producer prices is 28 percent and for consumer prices 8 percent. We can, consequently, conclude that pass-through is modest for producer prices and very limited for consumer prices. An exchange rate shock does, therefore, only have limited impact on consumer price inflation.

Keywords: Exchange-rate pass-through; price indices; impulse-response functions. (search for similar items in EconPapers)
JEL-codes: E31 F31 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (13)

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https://doi.org/10.32468/Espe.4703

Related works:
Journal Article: Exchange Rate Pass-Through to Domestic Prices: the Case of Colombia (2004)
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Persistent link: https://EconPapers.repec.org/RePEc:col:000107:002684

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