Economics at your fingertips  

Asymmetric import cost pass-through in GCC countries: Evidence from nonlinear panel analysis

Mouyad Alsamara, Zouhair Mrabet and Michel Dombrecht

Economic Modelling, 2018, vol. 75, issue C, 432-440

Abstract: This paper investigates the asymmetric impacts of import costs on inflation in GCC countries. We utilize data from GCC countries and their trading partners over the period of 1990:Q1-2014:Q4 to construct a new import cost index that captures changes in both foreign prices and exchange rates. The results indicate that inflation responses to positive shocks in import costs are larger than their responses to negative shocks, confirming the presence of an asymmetric impact of import costs on inflation. This result holds only when the external shocks occur in an Asian or North American country. Furthermore, the results indicate that shocks in import cost pass-through into inflation occur only in periods of economic expansion. According to these results, monetary policy makers should take into account the nature of the shock, the geographical origin of the shock and the state of the domestic business cycle when the shock occurs.

Keywords: Asymmetric analysis; Import costs pass-through; Price level; Nonlinear panel; Business cycle (search for similar items in EconPapers)
JEL-codes: C33 E31 E32 F31 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

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:

Access Statistics for this article

Economic Modelling is currently edited by S. Hall and P. Pauly

More articles in Economic Modelling from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-11-14
Handle: RePEc:eee:ecmode:v:75:y:2018:i:c:p:432-440